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FCC chair makes firmest case yet that broadband competition is lacking

Thu, 09/04/2014 - 2:11pm
Brian Santo

FCC chairman Tom Wheeler yesterday stated flatly that in too much of the U.S., there is no meaningful broadband competition, and that competitors are lagging behind public need. He presented his most thorough argument thus far that such is the case.

If enough people accept his propositions, Wheeler would then be able to justify reclassifying broadband as a communications service, which would give the FCC much greater authority to regulate broadband services.

With broadband reclassified under Title II of the Communications Act of 1934, the FCC will be able to more easily define and enforce network neutrality; overturn laws that several states have passed that forbid local governments from installing broadband networks; and take other measures that would encourage more, and more effective competition.

He’s been heading in this direction for months, and for months has been getting pushback from communications service providers (CSPs), whose broadband businesses are subject to barely any regulation at all and in many cases are up against minimal competition, and who want to keep it that way. And of course, he’s seeing resistance from doctrinaire free-marketers, including his two fellow Commissioners at the FCC appointed by Republicans.

Wheeler said a 25 Mbps connection, one of the most common connection speeds subscribed to by broadband customers, can now quickly be overwhelmed. He cited NTIA statistics that 1 in 5 homes in the U.S. can’t even get service at 25 Mbps. Depending on geography and the service tier desired, Wheeler said that for anywhere from 37 percent to 75 percent of U.S. homes, there is no choice of provider.

CSPs, especially cable operators, have pushed states to pass laws prohibiting municipal broadband, on the principle that governments should not compete with private business, and that should be the case even if private business declines to compete at all in an area where faster broadband is desired.

CSPs and free-marketeers have also been making the case that wireless connectivity at transmission rates that are a small fraction of speeds afforded by wireline broadband are equivalent. If that argument is accepted, then CSPs will be able to demonstrate that there is competition in those areas where there is only one wireline service provider, as long as broadband customers also have cellular service, thus negating that part of Wheeler’s argument.

That’s given rise to a lively dispute about whether or not to once again officially redefine what constitutes as broadband – the 4- or 5 Mbps that wireless carriers can provide now (and for the next several years), or a rate in the low double digits?

Wheeler stuck to a set of first principles he’s been expounding almost from his confirmation in his position:

  • One: Where competition exists, the Commission will protect it.
  • Two: Where greater competition can exist, we will encourage it.
  • Three: Where meaningful competition is not available, the Commission will work to create it.
  • Four: Where competition cannot be expected to exist, we must shoulder the responsibility of promoting the deployment of broadband for the sake of consumers and innovators.

The NCTA held to its opposition to anything the FCC might do: “Chairman Wheeler’s remarks about broadband competition underscore the importance of maintaining a light regulatory touch that encourages more investment from more companies.  The surest way to stifle further competition and investment in the broadband marketplace is to impose public utility Title II regulation on Internet access.”

Wheeler long ago told the cable industry that the FCC’s touch thus far hasn’t been “light,” it’s been “negligible,” and that if cable operators and other CSPs insist on thwarting the FCC’s reasonable attempts to operate consistently with the set of principles he’s been enunciating, he will reclassify broadband under Title II.

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