Is the FCC serious about broadband deployment?

Rarely has an agency exhibited a greater degree of schizophrenia than the FCC did last week, when it issued its Eighth Broadband Progress Report (Broadband Report) and its Special Access Report and Order. One decries the lack of broadband access for the 6 percent of the U.S. population that lives in the most sparsely populated areas. The other encourages America’s largest enterprises to perpetuate their use of non-broadband networks throughout the U.S.

On the one hand, in its Broadband Report, the FCC refuses to tell Congress that our country’s broadband deployment is reasonable and timely, despite access by 94 percent of Americans to high-speed broadband, defined as download at 4 megabit per second (Mbps) and upload at 1 Mbps (4/1) over wired networks. The FCC’s key reasons are: First, 19 million Americans, i.e. 6 percent of the population, scattered across two-thirds of the U.S. land mass, lack access to wired 4/1 broadband connection. Second, broadband adoption by consumers is too low--only 40 percent have chosen to adopt broadband at 4/1 speed or higher. Chairman Genachowski’s statement in the Broadband Order sets high goals: “We need to see ongoing increases in broadband speed and capacity, so that we’re routinely talking about gigabits, not megabits.”
 
On the other hand, in its Special Access Order, the FCC suspends its rules governing pricing flexibility in the special-access market. This is a market that the FCC sizes at $12 billion, providing mostly 1.5 Mbps connections, mostly to large enterprises and government but also to some small businesses. Chairman Genachowski notes in his statement explaining the suspension: “As one group of businesses, including representatives from the financial services, automotive, manufacturing, insurance, aerospace, package delivery, information technology, and transportation industries, told us, ‘special access services [are] the building blocks of our corporate services’.” These businesses are asking for lower prices on these 1.5 Mbps services, because they want to continue to use them in perpetuity.
 
How can America expect to deploy broadband at gigabit speeds throughout its vast expanse, if its largest businesses insist on using 1.5 megabit lines as the building blocks for their networks? The FCC is making heroic efforts to encourage the least educated, poorest, oldest American citizens to adopt broadband. Does it want to encourage our largest corporations to do so much less?
 
Every cell site, every ATM, every gas station, every branch office of every insurance company, every government outpost represents an opportunity to bring broadband into a neighborhood. As GigU and other FCC-praised efforts demonstrate, the more rural the neighborhood, the more important it is that enterprises spearhead the provision of broadband. The FCC cannot force enterprises to join the multi-megabit, much less the gigabit, parade. Neither can it force their providers to do so. But if it is serious about broadband deployment, it won’t encourage their demand to stay firmly and cheaply planted in the mid-20th-Century.
 
Kovacs is a Visiting Senior Policy Scholar at Georgetown University’s Center for Business and Public Policy. She has covered the communications industry for more than three decades as a financial analyst and consultant.

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