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FCC Perpetrates Broadband Policy by Press Release

Submitted on February 9, 2018

You’re reading the Benton Foundation’s Weekly Round-up, a recap of the biggest (or most overlooked) telecommunications stories of the week. The round-up is delivered via e-mail each Friday.

Round-Up for the Week of February 2 - 9, 2018

Kevin Taglang
    Taglang  

Late on Friday, February 2, the Federal Communications Commission released its Congressionally-mandated annual report on the availability of “high-speed, switched, broadband telecommunications capability” (for the sake of brevity, we’ll just use “broadband” below) for all Americans and, in particular, schools and classrooms. The FCC is charged with determining whether broadband service is being deployed to all Americans in a reasonable and timely fashion. Finding in the negative, the FCC must take immediate action to accelerate broadband deployment by removing barriers to infrastructure investment and by promoting competition in the telecommunications market. When the FCC last released a broadband deployment report, in 2016, the commission found that, indeed, broadband was not being deployed in a reasonable and timely fashion. The FCC’s Republican majority now concludes, in the 2018 Broadband Deployment Report, that the root cause of the U.S.’s broadband deployment woes were the FCC’s own actions to protect the Open Internet. But, apparently, the repeal of those consumer protections in December 2017 – a repeal that officially has not been implemented as of this writing – has restored the progress of U.S. broadband deployment. Or, at least, that’s what the FCC is asking us to believe.

The Bottom Line First

Officially, the FCC concluded that high-speed, switched, broadband telecommunications capability is being deployed to all Americans in a reasonable and timely fashion. But the FCC also stresses that this finding does not mean that all Americans now have broadband access. “Rather, it means that we are back on the right track when it comes to deployment,” the report says.

The Data

To write its report, the commission relied upon what it calls FCC Form 477 deployment data. All facilities-based broadband providers are required to file data with the FCC twice a year (through Form 477) listing where they offer internet access service at speeds exceeding 200 kilobits per second 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. A provider that reports deployment of a particular technology and bandwidth in a census block may not necessarily offer that service everywhere in the block.  Accordingly, deployment in a census block does not necessarily reflect deployment to all household or business locations in that block. So the FCC acknowledges that its analysis may overstate broadband deployment.

No one, not even the FCC, believes Form 477 is very accurate. However, the FCC considers it the most accurate data that is available.

The FCC data for this report is from December 2016 Form 477 filings. Keep that in mind when the FCC says “we are back on the right track when it comes to deployment.”

The Findings

For “fixed services” (service delivered to a specific location either via a wire or wireless):

  • As of year-end 2016, 92.3 percent of the overall population had access to fixed terrestrial broadband at speeds of 25 Mbps/3 Mbps -- up from 89.6 percent in 2015 and 81.2 percent in 2012.
  • But , over 24 million Americans still lack fixed terrestrial broadband at speeds of 25 Mbps/3 Mbps. (Even including satellite-delivered service, 14 million Americans are unserved.)
    • 30.7 percent of Americans in rural areas lack fixed terrestrial broadband at speeds of 25 Mbps/3 Mbps.
    • 35.4 percent of Americans in Tribal lands lack access to fixed terrestrial 25 Mbps/3 Mbps broadband.

In its press release accompanying the 2018 broadband deployment report, the FCC emphasizes that from 2012 to 2014, fixed terrestrial broadband internet access was deployed to 29.9 million people who never had it before, including 1 million people on Tribal lands. But from 2015 to 2016, new deployments dropped 55 percent, reaching only 13.5 million people, including only 330,000 people on Tribal lands.

For mobile services:

  • 99 percent of the American population has access to mobile LTE with a minimum advertised speed of 5 Mbps/1 Mbps.
  • 98.2 percent of Americans living in rural areas have access to LTE (and have since about the end of 2014).
  • 94.9 percent of Americans living in Tribal lands have access to LTE (and have since about the end of 2014).

Obviously, LTE reached nearly everyone by 2014, but in its press release, the FCC emphasized that from 2012 to 2014, mobile LTE broadband was newly deployed to 34.2 million people, including 21.5 million rural Americans. And, from 2015 to 2016, new mobile deployments dropped 83 percent, reaching only 5.8 million more Americans, including only 2.3 million more rural Americans.

For fixed and wireless services:

  • Approximately 92 percent of the population has access to both fixed terrestrial service at 25 Mbps/3 Mbps and mobile LTE at speeds of 5 Mbps/1 Mbps, up from approximately 89 percent in 2014 and 77 percent in 2012 (95.4 percent if satellite-delivered service is included).
  • However, approximately 25 million Americans lack access to both 25 Mbps/3 Mbps fixed terrestrial service and 5 Mbps/1 Mbps mobile LTE.
  • In rural areas, 68.6 percent of Americans have access to both services, up from 59.2 percent in 2014.
  • 97.9 percent of Americans in urban areas have access to both, up from 96.3 percent in 2014.
  • Over 99 percent of the American population has access to either fixed terrestrial service at 25 Mbps/3 Mbps or mobile LTE at minimum advertised speeds of 5 Mbps/1 Mbps in 2016.

Again, the emphasis in the FCC press release is a little misleading since LTE service was available so broadly by the end of 2014. The release emphasized that from 2012 to 2014, the number of Americans without access to both fixed terrestrial broadband and mobile broadband fell by more than half—from 72.1 million to 34.5 million, but the pace was nearly three times slower from 2015 to 2016, with only 13.9 million Americans newly getting access to both over those two years.

Demographic Data

The FCC finds that Americans with access to broadband service typically live in census block groups with a lower percentage of households living in poverty, and with higher average populations, population densities, per capita incomes, and median household incomes than Americans living in areas without access to broadband service.

Schools and Classrooms

The FCC measures broadband availability for elementary and secondary schools and classrooms based on a short-term goal of 100 Mbps per 1,000 students and staff – and a long-term goal of 1 Gbps per 1,000 students and staff. For this report, the FCC relies on an organizations called Education Superhighway, a recognized leader for research on school connectivity. According to Education Superhighway’s 2017 State of the States Report:

  • 94 percent of school districts, 88 percent of schools, and 39.2 million students, now meet the FCC's short-term connectivity goal of 100 Mbps per 1,000 users, up from 24.5 million students in 2015 and 34.9 million students in 2016.
  • Six percent of public school districts and 6.5 million students are not receiving broadband service that meets the short-term connectivity goal and 10,000 schools report insufficient Wi-Fi networks in their classrooms.
  • 22 percent of school districts currently meet the long-term goal, which is up from just nine percent in 2015.
  • 97 percent of schools have access to fiber.
  • 88 percent of schools report having sufficient Wi-Fi networks in their classrooms.
  • 2,049 schools still need access to fiber in order to meet connectivity goals, down from 9,500 in 2015.
    • Over three-quarters of the 2,049 schools that lack access to fiber infrastructure necessary to meet short term goals are rural or small-town schools
    • When these school districts sought fiber services in 2016, nearly half did not receive any bids from service providers

Broadband Adoption

Over 53 percent of U.S. households now subscribe to fixed 25 Mbps/3 Mbps broadband service – up from 11+ percent in 2012 and 48+ percent in 2015. Adoption rates are a bit better in “urban core areas” (nearly 57%) and slightly worse in “non-urban core areas” (48.5%). But the adoption rates on Tribal Lands is remarkably worse – just 32.6%.

How Do We Know We’re on the Right Track?

With the FCC claiming its net neutrality rules slowed broadband deployment in 2015 and 2016, how can it know that broadband deployment is now “on the right track” and is being deployed to all Americans in a reasonable and timely fashion? What data is there for deployment in 2017? None yet. But the FCC Republican majority bases its official findings on broadband providers’ press releases:

  • On January 8, AT&T announced that it had expanded – in 2017, when the FCC’s net neutrality rules were still in place -- availability of its Fixed Wireless Internet to 440,000 homes and small businesses. AT&T said the vast majority of these locations (not all of them) previously had no broadband service availability. AT&T’s Fixed Wireless Internet offers download speeds of 10 Megabits per second (Mbps) and upload speeds of at least 1 Mbps. Of course, the FCC’s benchmark for broadband is 25 Mbps/3 Mbps. AT&T caps Fixed Wireless Internet customers' internet usage at 170 gigabytes (GB)/month (to put that number into perspective, the average monthly broadband usage in U.S. homes in 2016 was 190 GB). AT&T receives subsidies from the FCC’s Connect America Fund, created in 2014 by FCC Chairman Tom Wheeler, to deploy its Fixed Wireless Internet service. Connect America Fund rules require companies that accept the funds to deploy broadband to 40 percent of the eligible locations by the end of 2017.
  • In late November 2017, Verizon announced it will deploy a commercial fifth generation (5G) wireless network in Sacramento (CA) in the second half of 2018. At the time, Verizon said it will announce two to four additional locations for 5G deployment at a later date, but that the deployments would not have a material impact on its 2018 capital expenditure. Like AT&T, the network will be used for fixed-wireless services.
  • On December 18, 2017, Frontier announced it exceeded its Connect America Fund 2017 deployment mandate in Florida, Idaho, Illinois, Indiana, Michigan, Tennessee, Texas, and Wisconsin. In nine other states Frontier serves (Arizona, Connecticut, Georgia, Montana, New York, North Carolina, Pennsylvania, Washington, and West Virginia), the company reached the 40 percent mandate. Frontier receives $332 million annually from the Connect America Fund to deploy broadband networks to 74,000 households and business.
  • Also in November 2017, Alaska Communications entered into an agreement to lease satellite capabilities from Eutelsat. The new satellite offering will provide middle mile broadband capacity to the remote St. Paul Island, a community north of the Aleutian Island chain almost 300 miles out in the Bering Sea. In November 2016, the Alaskan ISP secured Connect America Fund money from the Wheeler-led FCC. Alaska Communications also made an investment in fiber networks in May 2015, shortly after the net neutrality rules were approved.   Tanadgusix (TDX) is the primary internet service provider there, providing last mile broadband internet service to its customers through its newly laid fiber optic cable to each home.  TDX was created under the Alaska Native Claims Settlement Act of 1971 to provide economic wellbeing for the indigenous Aleut people who resided in the village of St. Paul. With few business opportunities on St. Paul, TDX operates successful business off the island that serves major metropolitan areas and Alaska’s remote oilfield operations.       

The FCC Republican majority concluded, “These new deployments are initial indicators that deployment is likely to accelerate again in part due to our recent efforts.” But, of course, the deployments aren’t really new – and were started during and, mainly, funded by the Wheeler-led FCC that adopted the net neutrality rules the current FCC says slowed broadband deployment. [Editor's note: should we mention, too, that broadband provider Charter increased its capital expenditures in 2017 under the net neutrality rules and is cutting them in 2018 since the repeal?]

Two FCC Commissioners Dissent

FCC Commissioners Mignon Clyburn and Jessica Rosenworcel were quick to criticize the broadband report. Commissioner Clyburn said:

[A] ... critical read of the report reveals that this year’s findings misinterpret “the plain text of section 706,” endorse a self-serving and amorphous measurement of “progress,” make changes to critical factors in its analysis, and rely heavily on projected deployment following actions taken by the FCC in 2017. Simply put, this report is biased, flawed, and woefully incomplete.

Commissioner Clyburn continued:

Instead of grappling with this unfortunate reality, this report blatantly suggests that Congress did not intend for the FCC to meet a rigid requirement that each and every American be served. Pardon me? Congress’ intent when it comes to these reports could not have been any clearer. The plain language of Section 706 states “the Commission shall determine whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion.” Similarly, the Broadband Data Improvement Act of 2008 requires the Commission to consider a plethora of factors and “compile a list of geographical areas that are not served by any provider of advanced telecommunications capability.” Those statutes clearly mandate that the Commission determine if broadband is being deployed to all Americans.

Instead of evaluating how close we are to connecting all Americans, this report now measures progress by comparing deployment in the present year to deployment in previous years. I am blown away that what is supposed to provide a comprehensive analysis of broadband deployment to all Americans— particularly those living in rural and Tribal lands— instead creates a new measurement of progress and misinterprets Congressional intent in order to declare “Mission Accomplished.” Even as it sets a new metric, the report adopts no standards by which we should judge any progress, nor does it back up its unsourced and breathless assertions that the 2015 [net neutrality rules] caused a drop in deployment.

Clyburn concludes:

Critical progress reports should not rely on the “hypothetical” when it comes to reaching a conclusion. Analysis based on data that shows the current state of “Broadband Progress,” not misinterpreted measurements and cavalier explications of Congressional intent that tilts the scale against the needs of the consumer longing for broadband, is what we need. Indeed, the deployments the majority loudly touts pale greatly in comparison to the deployments that occurred in the year after the adoption of the 2015 Open Internet Order. But if you are desperate to justify flawed policy, I think the straw-grasping conclusions contained in this report are for you.

Commissioner Rosenworcel said:

There are also many facts in this Broadband Deployment Report, but what stands out most is a single finding. This report concludes that in the United States the deployment of broadband to all Americans is reasonable and timely. This is ridiculous—and irresponsible. Today there are 24 million Americans without access to broadband. There are 19 million Americans in rural areas who lack the ability to access high-speed services at home. There are 12 million school-aged children who are falling into the Homework Gap because they do not have the broadband at home they need for nightly schoolwork. Ask any one of them if they think the deployment of the most essential digital age infrastructure is reasonable and timely and you will get a resounding “No.” To call these numbers a testament to our national success is insulting and not credible. To be sure, there are communications providers across the country that have done yeoman’s work to deploy more high-speed services in hard-to-reach places. They deserve kudos for their effort. But it is premature for this agency to declare mission accomplished.

Conclusion

Clearly, the FCC's best, most-recent broadband deployment report demonstrates persistent digital divides in the U.S. According to the law, the FCC is supposed to take immediate action to accelerate broadband deployment by removing barriers to infrastructure investment and promoting competition. Instead, the FCC celebrates providers' press releases about government-subsidized broadband deployment and the removal of key consumer protections. For the people living in the areas who cannot access broadband – in their homes, schools, and businesses – the FCC's conclusions must ring awfully hollow. They are waiting still for opportunity – in employment, education, entertainment, and health care – that most other people in the U.S. can now take for granted. And for these communities, the FCC offers a press release.

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