In its January 28, 2016 meeting, the FCC voted to accept its Annual Broadband Progress Report.  The Report keeps in place the current Commission definition for broadband and concludes that the Commission has the authority under section 706 of the Telecommunications Act to do more to bring broadband to the 34 million people in the United States that lack it today. 

The Report, however, may not be the final word on this issue as Republicans in Congress believe that the Commission is using the new broadband definition to inappropriately trigger section 706 to increase its control over broadband.  Here is the background to the current acrimony between the Commission and its broadband detractors.

In January 2015, the FCC voted along party lines to change the definition of broadband to require at least 25Mbps downstream and 3Mbps upstream speeds, a sharp increase from the previous definition.  A year later, that vote is having a profound effect on the industry.

The vote occurred because under section 706, the Commission is required to determine whether broadband is being deployed to Americans in a reasonable and timely fashion. According to the Commission, if the answer is negative, the Act requires it to “take immediate action” to speed deployment. The Commission defended its increase in the speed required for effective broadband by noting that the Act states that broadband isn’t the bare minimum needed to use the Internet. Instead, it is “advanced telecommunications capability” that “enable[s] users to originate and receive high-quality voice, data, graphics, and video telecommunications using any technology.”

As per usual, Republican commissioners Ajit Pai and Michael O’Rielly dissented from the decision. In his dissent, O'Rielly said the FCC is continually moving the goalposts so that the section 706 standard can never be met, and thus ensuring that the Commission continually expands its power.

[T]he Report narrowly holds that if some Americans do not have access to 25/3, then the standard isn’t met. This inflexible test constructed by the majority, which ignores the significant time and costs required to expand and upgrade networks, simply does not comport with the statute or with reality. It also ensures that any standard the Commission sets will never be met, which seems to be the purpose.

The new broadband definition was used for the first time in the Broadband Progress Report adopted on January 28, 2016. FCC Chairman Wheeler issued a Fact Sheet with the Report’s findings. They were not positive for Internet service providers (ISPs):

While the nation continues to make progress in broadband deployment, advanced telecommunications capability is not being deployed in a reasonable and timely fashion to all Americans. Factors leading to this conclusion are as follows:

•      Approximately 34 million Americans still lack access to fixed broadband at the FCC’s benchmark speed of 25 Mbps for downloads, 3 Mbps for uploads. 
•      A persistent urban-rural digital divide has left 39 percent of the rural population without access to fixed broadband. By comparison, only 4 percent living in urban areas lack access. 10 percent lack access nationwide. 
•      41 percent of Tribal Lands residents lack access .
•      41 percent of schools have not met the Commission’s short-term goal of 100 Mbps per 1,000 students/staff.  These schools educate 47 percent of the nation’s students, 
•      Only 9 percent of schools have fiber connections capable of meeting the FCC’s long-term goal of 1 Gbps per 1,000 students o Internationally,
•      The U.S. continues to lag behind a number of other developed nations, ranking 16th out of 34 countries.

ISPs were adamantly opposed to the new broadband definition and the conclusion that broadband is not being deployed adequately. For example, AT&T stated,

It's bad enough the FCC keeps moving the goal posts on their definition of broadband, apparently so they can continue to justify intervening in obviously competitive markets… It's beginning to look like the FCC will define broadband whichever way maximizes its power under whichever section of the law they want to apply.

USTelecom agreed:

It would seem that the FCC’s report should carry the headline ‘our policies have failed’ since it concludes that six years after adoption of the national broadband plan, the commission’s actions haven’t produced even so much as a ‘reasonable’ level of broadband deployment," the group said. "But, of course, with more than $75 billion a year being invested by broadband providers, network capacity burgeoning, and speeds increasing exponentially... no one actually believes that deployment in the United States is unreasonable. Unfortunately, this annual process has become a cynical exercise, one that eschews dispassionate analysis, and is patently intended to reach a predetermined conclusion that will justify a continuing expansion of the agency’s own regulatory reach.

Now ISPs are joined in their criticism by their Republican allies in the Senate.  Six Republican Senators—Steve Daines (R-Mont.), Roy Blunt (R-Mo.), Ron Johnson (R-Wis.), Roger Wicker (R-Miss.), Deb Fischer (R-Neb.), and Cory Gardner (R-Colo.) outlined why they were upset in a letter to Mr. Wheeler. They stated:

We are concerned that this arbitrary 25/3 Mbps benchmark fails to accurately capture what most Americans consider broadband... Looking at the market for broadband applications, we are aware of few applications that require download speeds of 25Mbps," the senators wrote. "Netflix, for example, recommends a download speed of 5Mbps to receive high-definition streaming video, and Amazon recommends a speed of 3.5Mbps. In addition, according to the FCC's own data, the majority of Americans who can purchase 25Mbps service choose not to."

Those who support the Commission assert, however, that the Republicans' argument assumes a household with just one Internet-connected device running a single application. When the FCC increased the new definition of broadband it said that families are using multiple devices simultaneously and that the older broadband standard was inadequate for evaluating whether broadband capable of supporting today’s high-quality voice, data, graphics, and video is being deployed to all Americans in a timely way.

It is still to be determined if ISPs and Republicans will work together to try to overturn the Commission’s conclusions or whether ISPs will simply acquiesce and change their broadband service offerings.  For now, however, it looks like yet another clear victory for the Commission and an increase in its power over broadband services. 

By Andy Regitsky, CCMI