FCC Sharply Divided over Broadband Report’s Deployment Conclusions

The report had been savaged by USTelecom even before it was released (CD July 20 p 10). FCC Chairman Julius Genachowski said the commission had little choice but to reach an unfavorable conclusion about the state of deployment based on the data it had collected in the most comprehensive investigation to date.

"The report points out the great broadband successes in the United States, including as many as 290 million Americans who have gained access to broadband over the past decade,” Genachowski said. “But the statute requires more. It requires the agency to reach a conclusion about whether all -- not some, not most -- Americans are being served in a reasonable and timely fashion. In other words, it requires a conclusion about whether the United States is on the road to achieving truly universal broadband availability, of the kind that our country achieved in the previous century with respect to traditional telephone service."

A senior FCC official in the chairman’s office said the industry should not be concerned that the report will serve as an opening for more regulation from the commission. “That’s a red herring” and a “talking point,” the official said. “The press release details what things we are aiming to accomplish -- USF, spectrum and rights of way. … We are simply working towards realizing the recommendations of the National Broadband Plan."

The official noted that carriers and the groups they represent have gone on the record in various proceedings and conceded themselves that they cannot serve some areas based on the cost of deployment.

McDowell questioned what had changed since previous reports, which reached favorable conclusions. “Section 706 of the Telecommunications Act of 1996 requires that the FCC determine whether ‘advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion,'” he said. “In all previous reports dating back to 1999, the FCC has answered ‘yes’ to that question. In this Report, however, the answer is ‘no’ for the first time. This 180 degree reversal is unsettling considering that since the issuance of the Commission’s first Section 706 Report, America has made impressive improvements in developing and deploying broadband infrastructure and services.”

The report incorrectly emphasizes subscribership, contrary to Congress’s intent in requiring the FCC to analyze the state of deployment, McDowell said. “In many instances the Report confuses the facts by substituting the terms ‘deployment’ and ’subscribership’ as if they were synonymous and interchangeable,” he said. “They are not. ‘Deployment’ and ’subscribership’ are two distinct concepts with different attributes and areas for improvement. Our task is to focus on Congress’ explicit directive to analyze deployment progress for purposes of the Section 706 Report. Today, however, the majority is sidelining the deployment figure of 95 percent in favor of a seemingly smaller subscribership number. It is only reasonable to question the rationale behind this confusing pivot."

McDowell warned that the report could lead to more regulation. “The plain language of Section 706 was written with a deregulatory bent, but I am concerned that regulating with a light touch is not what this current Report will be used for in the future,” he said.

Baker voiced similar concerns in her statement. “In every prior Section 706 Report, the Commission concluded that broadband deployment was timely and reasonable,” she said. “In a striking departure from that decade of consistent Commission findings, the Commission has changed course by concluding that broadband deployment now is not reasonable and timely. I cannot support this decision. Broadband infrastructure deployment and investment are a remarkable and continuing success story, and I am troubled by giving such significant efforts a failing grade.”

Baker found other conclusions in the report equally troubling. “First, the Report focuses almost exclusively on terrestrial broadband options. Section 706 is not technology specific, yet this Report limits its findings to terrestrial solutions even when discussing relatively low speeds of service easily reached by today’s wireless and satellite offerings,” she said. “Second, I am troubled by our decision as a regulatory agency to decide a fixed definition of broadband speed as 4 Mbps downstream, 1 Mbps upstream. … I would have preferred a more fulsome evaluation of broadband deployment based on the five tiers of broadband speeds adopted by the Commission to provide fuller context as to how broadband services are deployed and used across different speed tiers.” Baker also questioned whether the FCC wrongly adopts National Broadband Plan findings and recommendations “without opportunity for notice and comment as well as Commission deliberation."

But Commissioner Michael Copps, who had been sharply critical of previous reports, was pleased with this one. “While this may technically be the Sixth Report, it is -- in my opinion -- the first really credible effort by the Commission to deliver a report based on data of the quality and granularity needed to be truly responsive to Congress,” Copps said. With this Report, we have a much more comprehensive view of where our country stands when it comes to broadband availability, and we have measures for assessing our progress nationally and as compared with our global competitors. … Good data is a prerequisite to good policy choices. The five preceding reports lacked such data and the results were poor policy choices."

Commissioner Mignon Clyburn said the FCC’s negative review of deployment is justified. “I believe that where companies have had a business case to offer broadband service, they have done so,” she said. “Nonetheless, there are many geographic areas in the U.S. where broadband still is not available because it is not economical for the private sector to deploy broadband and offer service. In order to remedy the lack of broadband availability, it is appropriate that the Commission fully consider the recommendations made in the National Broadband Plan to encourage broadband deployment, including for example, comprehensive reform of the universal service fund.

"This report underscores the need for comprehensive reform of the Universal Service Fund, innovative approaches to unleashing new spectrum, and removal of barriers to infrastructure investment,” the FCC said in a statement. “In an era when broadband has become essential for U.S. jobs, economic growth, global competitiveness, and democratic engagement, millions of Americans live in areas without broadband. Many of these Americans are poor or live in rural areas that will remain unserved without reform of the universal service program and other changes to U.S. broadband policy that spur investment in broadband networks by lowering the cost of deployment."

Statements on the report were rolling in at our deadline. “The FCC’s conclusion that broadband is not being reasonably deployed in the U.S., on a national basis, based upon 7 million homes in rural America that would require $23.5 billion in federal subsidies to connect to wireline broadband, is an unreasonable conclusion,” said AT&T Senior Vice President Robert Quinn. “To the extent that this report provides momentum to finally fix the long-broken universal service/intercarrier compensation problem, and to remove actual economic barriers to broadband investment, then that is a positive development. However, to the extent it is used as pretext to justify more investment-choking regulation a la the Title II debate, we will have squandered another opportunity to address the real broadband issues in this country."

"It makes no sense that, after the National Broadband Plan concluded that 95 percent of Americans have access to wireline broadband, the FCC majority now suggests broadband deployment is not reasonable and timely,” said Verizon Senior Vice President Kathleen Grillo. “The report’s conclusion is hard to understand, given America’s extraordinary progress in deploying broadband, fueled by hundreds of billions of dollars in private investment. Of course, we still have work to do to ensure that broadband reaches the remaining 5 percent of American households."

"Until now, the Federal Communications Commission has issued reports finding the state of broadband was acceptable, even as other nations were passing us by,” said Public Knowledge President Gigi Sohn. “The fact that a large percentage of the population simply has access to broadband, and slow broadband at that, is not acceptable. That would be like saying that everyone has access to food if there is one grocery store in a town."