What You Need To Know To Understand The FCC National Broadband Report.

The FCC is required by Congress to do lots of reports. Of these, the one that gets the most attention is the annual Report on broadband deployment under Section 706 of the 1996 Telecommunications Act (47 C.F.R. 1302). Sure enough, with the latest report announced as up for a vote at the FCC’s January open meeting, we can see the usual suspects gathering to complain that the FCC has “rigged the game” or “moved the goal post” or whatever sports metaphor comes to mind to accuse the FCC of diddling the numbers for the express purpose of coming up with a negative finding, i.e. That “advanced telecommunications capability” (generally defined as wicked fast broadband) is not being deployed in a timely fashion to all Americans.

 

As usual, to really understand what the FCC is doing, and whether or not they are actually doing the job Congress directed, it helps to have some background on the now 20 year old story of “Section 706,” and what the heck this report is supposed to do, and why we are here. At a minimum, it helps to read the bloody statute before accusing the FCC of a put up job.

 

The short version of this is that, because between 1998 and 2008 the FCC left the definition of “broadband” untouched at 200 kbps, Congress directed the FCC in the Broadband Data Improvement Act of 2008 (BDIA) (signed by President Bush, btw) to actually do some work, raise the numbers to reflect changing needs, and take into account international comparisons so as to keep us competitive with the world and stuff. This is why, contrary to what some folks seem to think, it is much more relevant that the EU has set a goal of 100% subscription of 30 mbps down or better by 2020 than what is the minimum speed to get Netflix.

 

Also, the idea that the FCC needs a negative finding to regulate broadband flies in the face of reality. Under the Verizon v. FCC decision finding that Section 706 is an independent source of FCC authority to regulate broadband, the FCC gets to regulate under Section 706(a) (general duty to encourage broadband deployment) without making a negative finding under Section 706(b) (requirement to do annual report on whether broadband is being deployed to all Americans in a “reasonable and timely manner”).

 

So why does the FCC do this report every year if they already have regulatory authority over broadband. Because Congress told them to do a real report every year. This is what I mean about reading the actual statute first before making ridiculous claims about FCC motivation. Happily, for those who don’t have several years of law school and are ld enough to have actually lived through this professionally, you have this delightful blog to give you the Thug Notes version.

 

 

More below . . . .

As always with telecom, one of the confusing things is that you’re usually coming in during the nth+1 round of a fight that’s been going on since we passed the Telecom Act of 1996 (or even earlier). The Broadband Report continues this exciting trend. So let’s start with some essential background.

 

Why The Heck Does The FCC Do An Annual Report On Broadband Deployment?

 

Contrary to the popular belief that Congress in 1996 could never have foreseen the all encompassing wonderfulness that is the modern Interwebz, thus rendering all legislation today hopelessly outdated, a number of folks in Congress actually had a pretty good idea that this dial-up Internet thing was going to grow in economic and social importance. These members of Congress also recognized that the Gods of the Marketplace did not always distribute their blessings evenly to everyone. In addition to including things like the E-Rate Program (found at 47 U.S.C. 254(h)) to make sure that school kids got connected, the 1996 Act also included Section 706.

 

Section 706 recognized that even though no one could predict that nature of the next awesome new communications technology (hence the use of the term “advanced telecommunications capability”), the country would likely have the problem we have had since the old days of the railroad and the telegraph that some folks would get left behind. So Section 706 required the FCC to do two things:

 

(a) generally push to make sure that advanced telecommunications capabilities (what we now call “broadband,” but I’ll get to that in a minute) are deployed to all Americans in a timely fashion.

(b) do an initial report within 180 days of passage of the Act, followed by the occasional update, to make sure that things are going along OK. If they aren’t, do something about that.

 

The FCC released the results of the First Report in 1999. It set a definition of “advanced telecommunications capability” as 200 kbps in either direction. For 1999, when a T-1 line still made you a backbone provider, this wasn’t a bad definition. The Report also found that while most people in the U.S. didn’t have such blazingly fast speeds yet, that was OK. The technology was only just rolling out and it takes awhile for this stuff to get deployed and catch on.

 

At the time, the U.S. was absolutely #1 in deployed Internet (mostly dial-up) and Internet infrastructure (after all, we invented this stuff). We were in the midst of the first Dot Com Bubble and everything about our broadband future seemed totally awesome. So the FCC’s Report looked perfectly reasonable.

 

Time Marches On, FCC Keeps Same Criteria, U.S. Drops From First to Ummm . . . Pretty Bad.

 

Unfortunately, while time and tech development do not stand still, the FCC did. From 1999-2009, the FCC kept the same definition of broadband: 200 kbps in either direction (note, that included anything with substantially lower upload speeds. You were “broadband” for purposes of the FCC Report if you had 200 kbps down and 56 kbps up.

 

Again, it’s important to point out that the idea that we regularly need to upgrade the speeds and capacity of broadband wasn’t something no one thought of in 1996. Congress made it clear in the Universal Service principles in Section 254(c) that” “Universal Service is an evolving level of telecommunications services that the Commission shall establish periodically under this section, taking into account advances in telecommunications and information technologies and services.”

 

FWIW, I wrote about this particular aspect of broadband and the challenge it creates for public policy back in 2009 when we were doing the stimulus package. I called this “Zeno’s Broadband Build Out Paradox.” The more broadband capacity we have, the more ways people use it, driving up demand (the FCC would later call this the “virtuous cycle”). As a result, we could not rely on a single build out cycle to future proof our broadband network. We needed to develop policies that fostered sustainable and steady growth. As I also discussed, this is awful news for broadband providers, because no one likes to keep spending to upgrade the network. This was even more true in the 00s, when expectations were low and we didn’t have enough high-quality broadband to make a real difference in people’s lives.

 

Not surprisingly, broadband providers liked things just fine. After all, we kept improving deployment of crappy broadband every year. Even in the mid-00s the FCC recognized that cable and DSL were it for broadband (but consoled themselves with the thought that a “third pipe,” such as broadband over power lines, was so close to deployment that we didn’t need to regulate the existing duopoly). So if both cable and DSL continued to suck (and roll out fairly slowly) while prices stayed high, who could tell the difference between timely deployment and crap? After all, Section 706 requires determination of whether broadband is being deployed “in a timely manner.” If you have no basis for comparison, how do you know it’s running late and overpriced?

 

One response by critics (both Republican and Democratic or just plain frustrated) was comparison with other countries. In 1999, the U.S. was king of the world when it came to broadband. By the mid-00s, we had slipped in most major national rankings to somewhere in the 10th-20th place range. Studies also noted that Americans paid a fairly high price for their crappy speeds as compared to most other countries. Broadband industry defenders responded with a long list of reasons why these studies were wrong, biased, other countries have different terrain, don’t have our awesome competition between cable and DSL (in later years, this would be replaced with the awesomeness of our mobile broadband). And Thus Do They Do Even Unto This Day.

 

Mind you, as I described in this blog post from back in the day, the insistence by broadband providers that no one could actually hold them to any standard to see if they were doing their job did not prevent them from insisting that getting rapid deployment of bigger, better broadband required Congress and the FCC to cater to their every demand. After all, they insisted, it’s a vital national policy to get high speed broadband to all Americans, and to keep expanding that capacity to ensure our international competitiveness and digital future and stuff. But when it comes to ascertaining whether the broadband industry actually does a good job of this, and whether all Americans get to benefit from the broadband revolution, we were supposed to just take the cable and telephone industries’ words for it.

 

Things Get Desperate And Folks Start To Actually Act

 

Remember, this was back in the day before Republicans went crazy and you could still get stuff done. By the 2007, we had a strong consensus of Democrats and Republicans seriously fed up with the crappy state of broadband, and seriously concerned that a lot of folks (particularly in rural America) were not getting any access at all. There was also a lot of general agreement that this wasn’t just bullshit about feeling good or watching cat videos. Our national economy and future economic growth increasingly depended on getting bigger, better broadband. Finally, despite all the excuses for why our broadband remained super hunky-dory and all that international comparison stuff didn’t matter, it really started to bug a lot of folks in Congress that the U.S. pretty consistently in just about every report not paid for by a U.S. broadband provider or trade association of providers ranked US broadband as mediocre and over priced. Non-tech industries that increasingly relied on broadband for International sales and transactions began to warn darkly that our international competitiveness would suffer.

 

The FCC Under Kevin Martin Takes The First Step.

 

It was actually the Republican FCC under Kevin Martin that took the first step in recognizing that the FCC’s traditional 200 kbps standard was not anywhere near enough to count as “advanced telecommunications capability” anymore. In the Fifth Broadband Report, released in 2008, the Republican FCC announced an important change in direction. The FCC would now divide broadband into “tiers.” The tiers the FCC picked were: “(1) greater than 200 kbps but less than 2.5 megabits per second (mbps); (2) greater than or equal to 2.5 mbps but less than 10 mbps; (3) greater than or equal to 10 mbps but less than 25 mbps; (4) greater than or equal to 25 mbps but less than 100 mbps; and (5) greater than or equal to 100 mbps.” (emphasis added)

 

Additionally, the FCC stated that the goal of the broadband report would now be “to evaluate broadband deployment by monitoring the migration of customers and services to higher speed tiers, beginning at the 200 kbps threshold. By doing so, the Commission can evaluate and track broadband deployment over time against a common benchmark to determine whether it is being deployed in a reasonable and timely manner. Thus, in this Report we evaluate broadband deployment by speed tiers for the first time.” (Emphasis added.) This, the FCC reasoned, was vitally important because different customers needed different speeds for different applications, and without tracking across multiple speed tiers and tracking “migration” of customers to increasing speeds, the FCC could not gauge of all Americans were getting the broadband needed to enjoy the majority of applications Americans increasingly expected and depended on from their broadband connections.

 

Let’s go over that again for those of you who think the Democrats made up this idea of “moving the goalposts” by continuing to raise the speed by which we define acceptable levels of broadband based on what people need and expect from their broadband connection. It was the Republicans that came up with the idea of increasing speed tiers and that the purpose of the FCC’s broadband deployment report was to track migration from the slower speeds to faster speeds, based on  expanding user expectations of what broadband could do. (Also of note, the Republicans came up with the 25 mbps download speed benchmark 8 years ago as a goal on the way to 100 mbps download speed.) The Dems, btw, dissented on the grounds that the Republicans were not being nearly aggressive enough based on how the rest of the world was eating our broadband lunch.

 

Congress Decides The FCC Still Not Doing Enough. Passes BDIA.

 

Congress, however, decided that the FCC had not moved nearly aggressively enough and needed much clearer direction on what they expected to have the FCC do and why. This prompted Congress to pass (and Republican President George Bush to sign) the Broadband Data Improvement Act of 2008 (BDIA) (now incorporated in part in 47 U.S.C. 1303).

 

First, Congress made a bunch of official findings. Notably that “Continued progress in the deployment and adoption of broadband technology is vital to ensuring that our Nation remains competitive and continues to create business and job growth.” To make sure the FCC focused on the right issues, the BDIA directed the FCC to do the Report required by Section 1302(b) annually (not just occasionally), explicitly instructed the FCC to do international comparisons, directed the FCC to make periodic surveys of how consumers get broadband, how much they pay for it, the actual (as opposed to advertised) speeds they get, and — if they don’t subscribe to broadband — why not.

 

Anyone reading the statute will note a few rather important things. (1) Congress intended the FCC to get a lot more serious about the broadband Report; (2) the Broadband Report explicitly does not ask about competition (effective or otherwise), and (3) Congress very clearly told the FCC to stop taking the broadband industry’s word on how broadband deployment was going and do some investigating itself — especially international comparisons and actual consumer use/expectation — for the express purpose of making sure that the broadband industry did not sit on its lazy profit-maximizing ass. While the Report didn’t dictate any consequence of our broadband industry going stagnant (or otherwise failing to meet growing need), Congress made clear it did not want the FCC to structure the report so the broadband industry could keep passing just by showing up.

 

Congress Then Directed The FCC To Adopt A National Broadband Plan To Make Sure Our Broadband Infrastructure Would Keep Improving.

 

Just in case anyone missed the point that Congress intended that the FCC should keep prodding providers to improve our broadband infrastructure, Congress mandated, as part of the American Recovery and Reinvestment Act of 2009 (Sec. 6001(k)), that the FCC prepare a National Broadband Plan that would explicitly detail a ten-year plan for making sure that the U.S. continued to get better, more awesome and more affordable broadband that could lots more stuff. Sec. 6001(k) of ARRA explicitly instructed the FCC to “seek to ensure that all people of the United States and shall establish benchmarks for meeting that goal,” and to “establish benchmarks for meeting that goal.”

 

Or, in other words, that it was actually the FCC’s job to “move the goalposts” on what constituted “timely deployment” of broadband to “all Americans” so that we did not keep the same crappy definition of broadband in place for another 10 years.

 

In the National Broadband Plan, the FCC, set a bunch of goals for 2020. Of relevance here, the FCC targeted “100 million homes” have access to broadband at 100 mbps/50 mbps,” that everyone else should have “affordable access to robust broadband service,” and that the U.S. should lead the world in broadband awesomeness. The National Broadband Plan also stated that one of the primary means of implementing the plan would be “publish an annual evaluation of the plan progress and effectiveness as part of the annual Section 706 Advanced Services Inquiry.”

 

To Recap: The Annual Broadband Report Is Supposed To Keep Raising Speed and Pushing The Industry to Meet the Goals of The National Broadband Plan And Keep The U.S. Competitive. It Is NOT About Competition, NOT About Whether Things Are Better Now Than Before, NOT About Whether The Broadband Industry Is Doing Their Bestest  Like the Little Engine That Could, And NOT about Regulating Anything.

 

Unfortunately, no sooner did Congress actually order the FCC to do all this stuff when we suffered a massive attack of Obama Derangement Syndrome. Ever since the FCC has actually tried to do the job that Congress directed it to do, which doesn’t actually have any impact on the FCC’s authority to regulate (since the FCC can regulate broadband under Section 1302(a) without an adverse finding under 1302(b)), we have seen the broadband industry and Republicans proclaim that the FCC is engaged in a sinister plot to deny reality in order to expand its regulatory power to oppress the free market, make our broadband socialist, and somehow take away our guns.

 

Sadly, this gets credibility because (a) for reasons I don’t understand, no one else seems to remember the last 20 years since 1996 except me; and (b) very few people actually go to the trouble of reading the statutes.

 

So Why Adopt 25 mbps Down? 

 

We went through this last year when the FCC actually adopted the 25 mbps down number. Nevertheless, here are a few more factors to note when considering the reasonableness of the 25/3 mbps number.

 

The Republican FCC came up with the 25 mbps number in 2008. Remember the discussion of the 5th Broadband Report above? That was in in 2008, or about 8 years ago. At that time, the Republican FCC identified 25 mbps down as a speed tier to which they expected consumers to migrate. True, the Republicans did not say when they expected this to happen. But is it really so unrealistic to say “it’s been 8 years already, what the heck is going on with this migration to higher services tier?”

 

 The National Broadband Report says we need 100 million people at 100 mbps in another 4 years. Remember the National Broadband Report? It sets a lot of goals. Like the 2008 Republican Broadband Report, the National Broadband Report identified 100 mbps as where we ultimately wanted to end up. The National Broadband Report targeted 100 million people having 100 mbps down by 2020. We have 4 years to go. If we can’t make progress on 25/3, which is supposed to be the “robust broadband” for the rest of the U.S., then how the heck are we going to meet the National Broadband Plan Goal by 2020.

 

Europe has an explicit goal of 100% penetration at 30 mbps by 2020. Remember the part where Congress explicitly directed the FCC to look at what other countries do and make sure we remain internationally competitive? Well, the European Union (and that’s the whole EU, so no lame excuses about how this or that particular country is not really comparable) has a plan of its own as part of its “Single Digital Market Initiative.” Our goal of 25 mbps national is comparable to the EUs goal of 30 mbps download for the whole Eurozone.

 

Didn’t we already cross this bridge. The FCC settled on a definition of 25/3 for broadband in the Annual Report last year. Do people think that the expectations of Americans, their overall dependence on broadband, and the pace of deployment internationally somehow dropped over the last year? In theory, the broadband industry, if it is doing its job, will show significant improvement between last year and this year (although it may still not have closed the gap between what the U.S. needs and what American consumers can actually access or afford). If you read the general wailing and breast beating from Republicans and the broadband industry, you would think this was some massive surprise that fell out of thin air. You may not like it, but it is not exactly a surprise or “moving the goalposts.”

 

And, of course, we keep doing more with this stuff and hooking more devices into it. this isn’t about some theoretical speed for Netflix. Yes, back in 2011, when the FCC first raised the speed for broadband to 4/1 (and the industry and Republicans freaked out and called it an evil power grab conspiracy, moving the goalposts, blah blah rinse lather repeat), the FCC emphasized that Americans expected to be able to stream video, which required at least 4 mbps down. Now, as reported last year in the 2o15 report, that measurement doesn’t cut it. In the last 5 years, Americans have come to expect more from their broadband connection. As Congress explicitly directed the FCC to do in the BDIA, that means the FCC must upgrade its definition of what “timely deployment” of broadband means.

 

Conclusion

 

I labor under no delusion that any of these facts will in any way impact what people say about the FCC’s decision to (for the second year in a row)set a broadband benchmark of 25/3 in the annual report. We are long past the day when we could achieve bipartisan consensus on the idea that America needs to keep improving in the broadband department.

 

But for those who care about substance, it’s important to understand what, in fact, Congress ordered the FCC to do and why. This isn’t supposed to be some report card that gives the industry a gold star based on whether people can do more now than they used to be able to do. It’s supposed to be an actual report so we can make sure that we have a country where everyone has access to enough broadband to do the things that make broadband part of our critical infrastructure and modern economy.

 

If Congress wants the FCC to lie about this stuff and concentrate on making us feel good, fine. Change the law. Until then, don’t keep acting all shocked and angry when the FCC does what Congress directed it to do.

 

Stay tuned . . .

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