Wednesday, November 08, 2023

Pitfalls of FCC's Proposal to Sharply Raise Broadband Benchmark Speed

On November 1, the FCC released a Notice of Inquiry for its upcoming Broadband Deployment Report – also known as the 706 Report. In the Notice is a proposal to increase the benchmark download/upload speeds for defining broadband Internet access services from 25Mbps/3 Mbps to 100 Mbps/20 Mbps.

Expect to hear more from Free State Foundation scholars on this matter in the coming weeks. That said, Free State Foundation scholars have published papers this year and last recommending that the FCC set broadband speed benchmarks that reflect real-life common uses by Internet end-users. And they identify potential downsides to sharply raising those benchmarks. 

 

Free State Foundation President Randolph May and Senior Fellow Andrew Long published an August 2023 Perspectives from FSF Scholars, titled "The FCC Should Define "Broadband" Based on Actual Consumer Usage." FSF President May and Mr. Long wrote in the context of the previously existing 2-2 deadlock of the Commission’s members on the matter of broadband speed benchmark, yet their take is entirely relevant today:

We contend that the reason for this apparent stalemate regarding the proposed new benchmark is that it seemingly is based on preconceived policy notions, rather than on evidence-based technical and economic foundations. The Biden Administration consistently has acted in ways to prioritize a specific distribution technology – fiber-based networks – over other wholly viable, and often far more cost-effective, solutions. Federal agencies tasked with distributing multiple billions in broadband subsidies have collaborated in that effort by issuing rules that embrace eligibility requirements – relating to both speeds and distribution technologies – that tilt the scales toward fiber.

 

But to meaningfully determine "whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion," as it is required to do annually by Section 706 of the Communications Act, the FCC ought to leverage its technical and economic expertise, and input from the public, to develop an evidence-based model as to what "advanced telecommunications capability" in fact entails. A deep dive into actual consumer usage of the Internet is required and in all likelihood will produce much different – and more relevant – results than policy-driven line-drawing that starts with favored distribution technologies and works backward. 

Additionally, Duke Professor Michelle Connolly, a former FCC Chief Economist and a member of FSF's Board of Academic Advisors, published in an insightful May 2023 Perspectives from FSF Scholars, titled "Mindfully Wasteful Spending: The Definition of Broadband." Among the salient points made by Prof. Connolly:

The FCC's definition is supposed to represent the minimum threshold for service to officially count as broadband service. It is not supposed to represent the minimum needed for a household with five gamers, two live streamers, and two grandparents streaming to two ultra-high definition 4K TVs 24 hours a day. Nor should it.

And according to Prof. Connolly:

The consequence of using such a limited (and limiting) definition is mislabeling "served" areas as "unserved," and, importantly, mislabeling areas that have no need for subsidization as "underserved." This allows funding intended to reduce digital divides to be redirected away from truly unserved areas and towards more economically attractive areas that are being mislabeled as "unserved" or "underserved" simply due to the entirely artificial constraints embodied in such a definition of broadband service.

For more, check out both of the foregoing Perspectives from FSF Scholars papers, as well as my September 2022 Perspectives, titled "A Case for Modest Speed Benchmarks in the FCC's Next Broadband Report."