When it comes to self-promotion, this FCC is as good as any. For example, despite considerable evidence that rural customers have few, if any, choices in their broadband service, the Commission declared in February that thanks to its actions, such as eliminating Title II broadband regulation and deregulating ILEC special access services, broadband deployment was better than ever. Therefore, no one should be surprised when early in 2019, the Commission eliminates most ILEC unbundled network element requirements, viewing them as no longer necessary. 

The agency bases many of its broadband conclusions on the data reported semi-annually in its Form 477. The directions accompanying that form state:

All facilities-based broadband providers are required to file data with the FCC twice a year (Form 477) on where they offer Internet access service at speeds exceeding 200 kbps in at least one direction. 

Fixed providers file lists of census blocks in which they can or do offer service to at least one location, with additional information about the service.

Mobile providers file maps of their coverage areas for each broadband technology. 

But what if this data was wrong, designed to make it appear there is much more competition than has occurred? That is the contention of a study just released by the Institute of Local Self-Reliance (ILSR). Which, according to Wikipedia is a “nonprofit organization and advocacy group that provides technical assistance to communities about local solutions for sustainable community development in areas such as banking, broadband, energy, and waste through local purchasing.” 

ILSR uses the Rochester, Minnesota market to argue that Form 477 Federal data makes Rochester appear to be an ultra-competitive region for broadband with virtually all residents having multiple broadband providers to choose from. However, after it delved deeper into the actual numbers, the Institute asserts that the data hides the fact that few customers outside the central city have many actual broadband choices. ILSR argues that this is a systematic problem for Form 477:

The FCC data tends to overstate broadband availability due to the way Internet Service Providers (ISPs) report coverage. If an ISP can provide service to one residence within a census block, the entire census block is marked as having access to Internet service. Similarly, if two providers each have a presence on a census block, even if they don’t serve any of the same residences, the entire block will appear to have competition. These flaws work in the favor of large, incumbent ISPs– areas that appear to have good broadband coverage will not receive more investment, leaving the large ISPs without competition. Cable company Charter Spectrum, for example, is the only option for most residents to access broadband speeds greater than 100 Mbps. This lack of competition can result in high prices and poor service for subscribers. (Introduction to Institute of Local Self-Reliance study, “Broadband Competition in the Rochester Region: Reality vs. Federal Statistics”, released August 22, 2018.).

Moreover, Form 477’s mapping requirements provide further opportunities for large ISPs to overstate their broadband coverage while simply confusing smaller ISPs:

Large, de facto monopoly providers have incentives to overstate their coverage and territory to hide the unreliable and slow nature of their service in many communities. Small providers often have trouble completing the FCC Form 477. This form requires 39 pages of instructions on how to properly complete it. Providers are supposed to submit it every 6 months, but many small providers find it confusing and frustrating- taking too much time to produce data that has dubious value given the flaws. Larger providers have plenty of staff to handle the form and seem to benefit the most from its flaws, as this data is often used to determine whether government programs should invest additional funds into an area, often by a competitive grant program. Areas that appear to be well covered will not result in more investment, leaving the incumbent providers without fear of competition. (Id. At p. 2).  

We are never likely to know if the FCC actually believes there are flaws in Form 477 unless the agency modifies it to make the data more meaningful. Pressure to do so may come from Congress. A bi-partisan group of Senators recently sent a letter to the Commission expressing concern with the accuracy of the agency’s mapping for its upcoming Mobily Fund II auction designed to bring 4G service to rural areas. If Congress continues to ratchet up the pressure, Form 477 may soon find itself under the gun. Until then, this study is a good incentive for the Commission to more closely examine actual broadband competition versus Form 477. 

The ILSR study can be found here.