The nation has made significant progress expanding high-speed Internet access in recent years, but further implementation of major reforms newly adopted by the Federal Communications Commission is required before broadband will be available to the approximately 19 million Americans who still lack access…
Acknowledging “billions invested by the communications industry in broadband deployment,” the announcement goes on to say:
… that approximately 19 million Americans—6 percent of the population—still lack access to fixed broadband service at threshold speeds. In rural areas, nearly one-fourth of the population —14.5 million people—lack access to this service. In tribal areas, nearly one-third of the population lacks access. Even in areas where broadband is available, approximately 100 million Americans still do not subscribe.
The report concludes that until the Commission’s Connect America reforms are fully implemented, these gaps are unlikely to close. Because millions still lack access to or have not adopted broadband, the Report concludes broadband is not yet being deployed in a reasonable and timely fashion.
The report and its announcement unleashed a barrage of articles across the country (see here, here, here, here, and here for a sampling) most of which spread nearly unchallenged the FCC’s conclusion that private broadband deployment has not been “reasonable” or “timely.”
In its bias for fixed broadband, however, the Commission’s announcement obscures report findings demonstrating that 98% of the population has access to wireline and wireless broadband.
As the report points out, U.S. wireline, cable, and wireless companies have invested more than a trillion dollars since 1996 and $66 billion just in 2011. The result is that 98% of Americans have access to either fixed or mobile broadband … [emphasis added]
…[the report] does not point out at least two very important considerations. One, the 6% of the U. S. population that does not have access to broadband occupies nearly two thirds of this country’s land mass. Without subsidy, providing coverage to those areas is prohibitively uneconomic. Two, for several years now, as the FCC has worked on USF/ICC reform, no carrier has known what, if any, subsidy might be available. Given those uncertainties, it has been unreasonable to deploy broadband in these vast highest-cost areas. The FCC is now in the process of developing a new subsidy-model in its USF/ICC reform process. If it develops a realistic model, we should see progress on broadband deployment in rural areas.
Given both the rapid improvements in wireless broadband and the adoption preferences by large portions of the youth and minority populations, the FCC’s disregard of broadband deployment in its conclusion demonstrates an unreasonable bias for fixed line broadband technologies. As Kovacs points out, FCC conclusions stretch logic even further:
In arguing that low adoption means that deployment is not timely and reasonable, the FCC ignores the economics of wired networks whose key component is fixed cost. For fixed-cost networks, low adoption means high cost-per-subscriber. Low total adoption split among multiple providers, as is the case in broadband access, means extremely high cost-per-subscriber. If there is anything unreasonable about the deployment of wired broadband access in the U.S., it is that it has been deployed so pervasively, despite low adoption rates.
…[the FCC] cannot continue to ignore mobile broadband. Second, the rural deployment issue will be solved if the FCC implements USF/ICC reform realistically and effectively. Finally, the FCC must take great care so that in attempting to address its valid concerns about adoption, it not deter deployment and competition.