Posted by: Hank Hultquist on July 30, 2010 at 10:25 am
When I first heard that the FCC’s 6th 706 report would find, for the first time, that broadband in the U.S. was not being deployed in a reasonable and timely manner, I wondered, half in jest, whether the FCC would single itself out for blame as the culprit responsible for this unfortunate situation. To my amazement, the FCC came fairly close to doing just that.
Paragraph 28 of the report tells the tale – somewhere between 14 million and 24 million Americans lack access to broadband (defined in the report as a minimum of 4 Mbps/1 Mbps); these folks are disproportionately lower-income Americans and residents of rural areas; and, finally, private investment is not going to solve this problem because (citing the National Broadband Plan) there is no business case to offer broadband service in these areas. The report went on to say that “market forces alone are unlikely to ensure that the unserved minority of Americans will be able to obtain the benefits of broadband anytime in the near future.”
What is the significance of this? Well, in conceding that no reasonable business plan would deliver broadband on a timely basis to these areas, the FCC has basically admitted that this report’s finding reflects a failure of public policy and not, as some have erroneously claimed, a defect in competitive conditions in the broadband marketplace.
So, where can this public policy failure be found? Mostly in the failed universal service programs described in my recent blog series on USF. Section 254 of the Telecom Act directs the FCC (and state regulators) to base universal service policies on a series of principles, including that “consumers in all regions of the Nation, including low-income consumers and those in rural, insular, and high cost areas, should have access to telecommunications and information services, including interexchange services and advanced telecommunications and information services, that are reasonably comparable to those services provided in urban areas.”
I read the 706 report to say, in effect, that policymakers have failed, up until now, to act in a reasonable and timely manner, on this statutory responsibility. Which should come as no surprise since the FCC has punted action on USF and intercarrier compensation reform for years.
And, while the initial press coverage of the FCC’s report focused on the Commission’s first ever negative conclusion (and the criticism of this conclusion), there’s been some more recent reporting that the FCC itself admits that the report was not meant as an attack against broadband providers. As discussed in my last two blogs, the FCC’s universal service policies for both wireline and wireless services have been haphazard at best. Indeed, the NBP itself points out that under the USF, “because broadband is not a supported service, today there is no mechanism to ensure that support is targeted toward extending broadband to unserved areas.” While the existing support mechanisms have allowed some small, rate-of-return phone companies to invest in broadband-capable infrastructure (NBP, Chapter 8 at FN 35), by and large they have not allowed larger phone companies, which actually serve the majority of subscribers in high-cost areas, to do so.
Having found that broadband deployment is not reasonable and timely, the FCC is required by law to take “immediate” action to do something about it. While some might take issue with the FCC’s view that having “several proceedings underway” constitutes immediate action, I do not, at least not yet. That is because the FCC has had proceedings underway on USF and intercarrier reform for almost as long as I’ve been in this business. But it’s not the case that the FCC has been prepared to make such reform a top priority.
I honestly think that, if the FCC can return its focus to the blueprint sketched in the NBP, real reform is in reach. Of course, I’ve been wrong before and it wouldn’t take me by complete surprise if (with apologies to Shakespeare) this turns out to be yet another tale heard by an idiot (that would be me), full of sound and fury, signifying nothing.
