FCC Rules on the Comcast/Appalachian Power Dispute: Speeding Decisions, Reducing Costs and Expanding Broadband

Over the last year the FCC has prioritized regulatory reform to speed decision-making and reduce costs associated with broadband deployment. Its February 5^th decision in a private dispute between Comcast Cable Communications and Appalachian Power Company (APCO) furthers these goals by promising to resolve legal issues faster. Specifically, its decision in the Comcast dispute indicates that, where possible, the Commission will use its adjudicatory powers to resolve disputes as early as possible, allowing deployment to proceed. Even parties that lose a particular case should welcome this reform as it saves them time and money from a pursuing a losing cause.

The dispute centered around Comcast’s use of utility poles owned by APCO. Existing laws generally allow broadband providers to place their equipment on poles owned by others. In return, pole owners have a right to be compensated for any necessary costs. Agreement on how to apply this general rule to specific cases can be contentious, however. In this case APCO argued that Comcast should pay the full cost of replacing poles that would have needed replacement anyway. Apparently, third parties had damaged some of the poles. Even though these poles would have to be replaced anyway, APCO insisted Comcast pay the full cost. Comcast argued it should only have to pay for costs that benefited it.

The Commission’s order was significant because it used new powers, proposed by the Free State Foundation, to reach its decision. Specifically, the FCC used an "accelerated docket" process meant to speed up broadband expansion. It also used a Rapid Broadband Assessment Team (RBAT) of FCC personnel which was formed in 2023 to “expedite the resolution of pole attachment disputes.” The RBAT determined the facts upon which the Commission made its judgement. In brief, the Commission unanimously ruled that Comcast was not responsible for bearing the burden of paying the costs that were caused by a third-party. Comcast was only responsible to the extent that it benefited from any pole replacement.

I applaud this for two reasons. The first concerns the substance of the Commission’s decision. Comcast should not bear responsibility beyond the marginal cost of its installations. To require more would unnecessarily increase the cost of broadband deployment which the Commission is supposed to further. In fact, since Comcast is undertaking this project as part of the federal Broadband Equity Access and Deployment Program, the additional costs would be partially funded by taxpayers. The decision also increases the ability of market forces to influence the final cost borne by each party.

The second reason is the use of an expedited process to resolve the dispute. The Commission was able to render its decision within 60 days of Comcast’s complaint. The presence of an experienced and neutral decision-maker promises to significantly reduce the cost of resolving future FCC pole attachment disputes. Finally, by providing parties with greater certainty about how it will rule, the FCC can encourage settlements. That should benefit everyone.

Charter, Comcast, and Broadcom Partner on Faster DOCSIS 4.0 Chipsets

At this week's Society of Cable Telecommunications Engineers® (SCTE) TechExpo 2024, cable operators Charter Communications and Comcast announced an agreement with chipmaker Broadcom Inc. to develop chipsets compatible with both versions of the DOCSIS 4.0 specification: Full Duplex DOCSIS 4.0 (FDX) and Extended Spectrum DOCSIS 4.0 (ESD).

Network hardware and modems incorporating Unified DOCSIS chipsets eventually will enable downstream speeds up to 25 gigabits per second (Gbps) over existing hybrid fiber-coaxial (HFC) broadband facilities. In addition, they will leverage Artificial Intelligence and machine learning to improve network management and security.

FCC's Dated View Drives Dramatic Shifts in Video Strategies

In a recent post featured in today's Policyband newsletter (subscription required), Golden West Telecommunications Cooperative explained (and apologized to its customers for) a $4 per month price increase for video services. The reason put forth: rising cable programming and retransmission consent fees. Golden West even pointed out that "[o]ther telecommunications cooperatives in South Dakota have discontinued cable TV due in part to rising costs" – an exodus part of "a broader trend" that includes WideOpenWest and Frontier Communications.

I and other Free State Foundation scholars have documented extensively the rapid and relentless ascent of streaming services and the corresponding loss of subscribers by traditional providers subject to the FCC's statutory authority. We have argued that these seismic shifts demand an aggressive deregulatory response from both Congress and the Commission. We have implicated the latter's refusal to eliminate one-sided rules – and confounding desire to impose still more one-sided rules – as an exacerbating factor in the decline of facilities-based Multichannel Video Programming Distributors (MVPDs). And we have explained how that decline harms competition and, in turn, consumers.

Not surprisingly, these marketplace trends are not slowing down. By way of example, Netflix days ago announced that it added 1.45 million subscribers in the United States and Canada during the second quarter, bringing its total to over 84 million. Traditional providers, on the other hand, experienced yet another "worst quarter ever" between January and March – an overall drop in pay television subscriptions that surpassed 12 percent – and analysts anticipate that second quarter results could be just as bleak.

Nevertheless, the FCC remains unwilling to remove its blinders and focus on the reality before it. Consequently, an increasing number of facilities-based MVPDs are adapting to the steadily more inhospitable competitive landscape by embracing an "if you can't beat them, join them" approach that deemphasizes their own legacy bundled offerings. Some, as noted above, are exiting the marketplace altogether and/or outsourcing their video operations to virtual MVPDs (vMVPDs) – WideOpenWest, for instance, has partnered with YouTube TV.

Others are striking deals with programmers and streaming platforms so that they can provide consumers the online alternatives that they prefer over traditional video packages. Examples include:

• Comcast is offering broadband customers the Xfinity StreamSaver™ bundle that includes Apple TV+, Netflix Standard with ads, and Peacock Premium with ads. As I noted in a recent post to the FSF Blog describing the available-at-retail Xumo platform, Comcast provides broadband customers with a Xumo Stream Box – which supports hundreds of third-party apps, including those of multiple vMVPDs that compete directly with its own legacy video products – at no additional cost.
• Charter gives subscribers to certain Spectrum TV® video packages access to Disney+ Basic and ESPN+. It also provides a free-for-six-months Xumo Stream Box to those that subscribe to Spectrum One Stream and add Spectrum TV.
• Altice USA last week announced the launch of Entertainment TV, a vMVPD service that offers over 80 channels for $30 per month and is available to broadband subscribers as part of its Optimum Stream product. As reported by Daniel Frankel, managing editor of Next TV, "[l]ike many cable operators, the company would prefer to leave linear video behind."

Traditional MVPDs find it increasingly challenging to win and retain customers in the vibrantly competitive battle for eyeballs that includes not just streaming alternatives, but social media platforms – particularly YouTube – and gaming. The FCC's dogged determination to saddle them with even more one-sided rules, such as unreasonable constraints on their ability to employ common billing practices, is exacerbating the situation and driving them to retrain their focus. As a result, consumer choice and overall consumer welfare are compromised.

Xumo Streaming Devices Compel the Sunset of Set-Top Box Rules

The Free State Foundation's recent comments responding to the FCC Office of Economics and Analytics' State of Competition in the Communications Marketplace Public Notice argued that "the Commission should follow its sound decision in September 2020 to terminate the 'unlock the box' navigation device proceeding and announce that the sunset provision set forth in Section 629(e) of the 1996 Act has been satisfied." Comcast's announcement on June 27, 2024, that Xumo streaming devices, which are available for purchase at retail and now support a fourth competing virtual Multichannel Video Programming Distributor (vMVPD), is a more than compelling reason to take that long overdue step.

Enacted nearly three decades ago in a context today wholly unrecognizable, Section 629 sought "to assure the commercial availability … of converter boxes … and other equipment used by consumers to access multichannel video programming … from manufacturers, retailers, and other vendors not affiliated with any" MVPD. The Commission effectively abandoned this misguided effort four years ago, but it stopped short of triggering the sunset provision set forth in subsection (e). Consequently, the regulatory requirement that cable operators make available "separable security" remains on the books (and imposes needless costs).

Source: xumo.com

The Xumo platform, the product of a joint venture that includes Comcast and Charter, provides consumers with access to three of the largest cable services – Comcast's Xfinity, Charter's Spectrum, and Mediacom's Xtream – as well as over 250 third-party apps.

Xumo devices can be obtained directly from these providers (in some cases for free) or – critically – at retail. The Xumo Stream Box can be purchased directly from the Xumo website, while Xumo TVs manufactured by Pioneer, element, and Hisense are available on store shelves at Best Buy, Meijer, and Walmart.

Consequently, the goal of Section 629 – to make it possible for subscribers to purchase a set-top box from a third party rather than lease one directly from their provider – clearly has been achieved. (The longstanding availability of app- and browser-based options to access MVPD services similarly satisfied that objective, notwithstanding the FCC's unwillingness to acknowledge that fact.)

But wait, there's more: not only does the Xumo platform foster device-based competition, it also facilitates service-based competition. As noted above, Xumo devices recently added support for Fubo, a vMVPD that competes with traditional MVPD offerings. And that's on top of existing support for popular vMVPDs YouTube TV, Hulu + Live TV, and Sling TV.

Subsection(e) of Section 629 states that any rules adopted thereunder "shall cease to apply when the Commission determines that (1) the market for the [MVPDs] is fully competitive; (2) the market for [devices] used in conjunction with that service is fully competitive; and (3) elimination of the regulations would promote competition and the public interest."

Xumo devices singlehandedly satisfy the first two conditions, and the sunset of one-sided rules that unjustifiably impose compliance costs clearly would "promote competition and the public interest." All that is left is for the Commission to acknowledge – "determine," per the language of the statute – that which undeniably is true.

Ookla Releases Updating Ranking of U.S. Fixed Broadband Provider Services

On July 17, Ookla released its U.S. Market Report for the second quarter of 2023, which ranks mobile and fixed broadband providers according to speeds and other service criteria. According to Ookla's Speedtest Intelligence® performance metrics, for Q2 of this year, Charter's Spectrum cable broadband service had the highest median download speed among fixed providers, at 243.02 Mbps. In a July 17 article, FierceTelecom reported that this is an increase from Q1, when Spectrum's median download speeds were 234.8 Mbps. For Q2, Cox ranked close second in median download speeds at 241.78 Mbps, Comcast's Xfinity was third with 233.25 Mbps and AT&T Internet was fourth with 210.12 Mbps. AT&T and Frontier were the two fixed providers for upload speeds, at 166.86 Mbps and 164.84, respectively. Ookla's Market Report also ranks U.S. fixed providers based on latency, consistency, and video. The report includes regional comparisons as well.

Certainly, the numbers shown in Ookla's Market Report are an improvement over figures cited in the FCC's 2022 Communications Marketplace Report as well as in my January 2023 Perspectives from FSF Scholars paper that reviewed the Commission's report. Continuing steady increases in fixed broadband speeds are predicated on strong network investment as well as network innovation. Ongoing and near-future rollouts of fiber and 10G cable broadband enabled by private market investment and innovation also will significantly boost upload and download speeds, latency, capacity, reliability, and security. To ensure further improvements in broadband network performance, the FCC should maintain its federal market-oriented policy towards broadband Internet access services that defines them as lightly-regulated "information services."

Comcast Announces Nationwide Rollout of Ultra-Fast 10G Services

On September 8, Comcast made a major public announcement of its plans to commence a nationwide rollout of multi-gigabit cable broadband Internet services. Comcast's next-generation broadband services will combine its 10G and DOCSIS 4.0 technologies with Wi-Fi 6E.

According its announcement, Comcast will offer speeds of up to 2 Gbps to homes and businesses in 34 cities and towns by the end of this year. Comcast plans to make these services available to more than 50 million homes and businesses by the end of 2025. And soon it will significantly boost both upload and download speeds, as Comcast stated it would begin offering 10G-enabled multi-gig symmetrical services in 2023. 

 

For U.S. consumers, Comcast's announcement portends the realization of the much-anticipated, high-speed, and high-capacity cable 10G platform, which will offer a stiff competition to fiber broadband services and fixed wireless access (FWA) services. (As an aside, NCTA observed in comments to the FCC in July of this year that cable broadband networks also rely on fiber-rich facilities, as cable customers use fiber for about 98-99% of the data transmission route). And a tremendous upshot for Comcast as well as for cable broadband subscribers is that the 10G upgrades do not require extensive digging or construction in and around households that it already reaches. 

 

Free State Foundation Senior Fellow Andrew Long has helpfully written in more detail about the tremendous potential service capabilities and economic value that will be generated by cable 10G networks. See Mr. Long's September 2020 Perspectives from FSF Scholars, "'10 G' Can Help Future-Proof Broadband Infrastructure" and his October 2020 blog post, "Study Predicts that Cable '10G' Platform Will Generate Substantial Economic Benefits." Importantly, and as Comcast's announcement indicated, 10G will be combined with ultra-fast and capacious Wi-Fi 6E capabilities. Mr. Long has excellently described Wi-Fi 6E capabilities in his February 2020 Perspectives "Wi-Fi 6E Can Modernize Unlicensed Wireless" and his January 2022 blog post, "D.C. Circuit Decision Clears the Way for a Wave of Wi-Fi 6E Devices."

Comcast's "Internet Essentials" and Similar Programs Make a Difference

 For the past decade, Free State Foundation scholars have chronicled new developments regarding Comcast's "Internet Essentials" program and the progress the program has achieved in furthering more ubiquitous broadband adoption, especially for low-income persons.

As recited in a September 2021 Free State Foundation blog post, Comcast’s $700 million investment in Internet Essentials already had connected 10 million Americans to high-speed broadband and, during that time, Internet Essentials was responsible for 40% of new Internet subscriptions by low-income families with school-aged children. For details on recent expansions of the Internet Essentials program, see these FSF blogs published in 2020, 2019, 2018, and 2017.

Comcast's Internet Essentials program is an undertaking that involves very substantial private investment, and as a recent NCTA post shows, by making broadband much more accessible to low income persons, it creates educational, entrepreneurial, and social opportunities that otherwise might not available.

 

Of course, other cable operators like Charter have programs similar to Comcast's to provide subsidies to support accessibility by low-income persons. NCTA reports that over 14 million people have been connected through the cable industry's low-cost broadband adoption programs. And similar efforts by non-cable ISPs like AT&T, Verizon, T-Mobile, and many others have connected many more.

 

All these private sector efforts should be applauded. They all contribute to closing the digital divide.

D.C. Circuit Decision Clears the Way for a Wave of Wi-Fi 6E Devices

As Free State Foundation Director of Policies Studies and Senior Fellow Seth Cooper explained in his post to this blog yesterday, the FCC's just-released Eleventh Measuring Broadband America Fixed Broadband Report confirms that high-speed Internet access speeds continue to rise dramatically.

As they do, the Wi-Fi networks that consumers rely upon to connect their devices to broadband service likewise must evolve, lest they serve as a bottleneck. Wi-Fi 6, the latest iteration of the ubiquitous wireless networking standard, can deliver that crucial complementary capacity – but requires large swaths of relatively unencumbered spectrum to do so.

In 2020, the FCC delivered, opening up the 6 GHz band to flexible unlicensed use. On the heels of a D.C. Circuit decision largely affirming the Commission's bold action, both consumer electronics manufacturers and Internet service providers (ISPs) are making available "Wi-Fi 6E" devices able to make full use of the increased speeds made possible by 5G, cable 10G, fiber, and other next-generation broadband distribution technologies.

As I explained in "Wi-Fi 6E Can Modernize Unlicensed Wireless," a February 2020 Perspectives from FSF Scholars, the "Wi-Fi 6E" label distinguishes Wi-Fi 6 devices able to operate in the 6 GHz band from those relegated to the relatively congested 2.4 GHz and 5 GHz bands.

Why is that distinction so important? The contiguous 1200 MHz of spectrum the FCC made available in the 6 GHz band makes possible the wider (160 MHz) channels required to maximize the full potential of the Wi-Fi 6 technical specification.

On December 28, 2021, the D.C. Circuit largely rejected challenges to the FCC's 6 GHz Order. For additional information, please see Free State Foundation Legal Fellow Andrew Magloughlin's post to the FSF Blog summarizing the court's decision in AT&T Services, Inc. v. FCC.

In a press release, Free State Foundation President Randolph May applauded the D.C. Circuit's recognition of "the considerable degree of deference to be accorded the FCC regarding technical spectrum management matters" and, in particular, its appreciation of the technical implications of the agency's "harmful interference" standard.

In that decision's wake, Wi-Fi 6E devices are proliferating.

The 2022 Consumer Electronics Show is underway, and companies including Netgear and TP-Link have utilized that high-profile platform to unveil new Wi-Fi 6E devices. Netgear's Nighthawk WiFi 6E Router provides speeds up to 10.8 gigabits per second (Gbps) and the low latency (lag) that hard-core gamers, among others, crave.

Meanwhile, TP-Link's Archer AXE200 Omni AXE11000 Tri-Band Wi-Fi 6E Router utilizes mechanically rotating robotic antennas to deliver speeds up to 11Gbps:

Source: TP-Link's website.

In addition, ISPs are beginning to roll out Wi-Fi 6E-compatible routers directly to their subscribers. On January 3, 2022, Comcast announced that the new version of its xFi Advanced Gateway supports Wi-Fi 6E – and thus is the "first to support the speeds of the future – symmetrical Gigabit speeds" that the cable 10G platform promises to deliver.

In December 2021, Verizon also revealed a new router able to operate in the 6 GHz band. Notably, while the device is compatible with both its FiOS fiber-based offering and Verizon 5G Home Internet service, the company is providing it to subscribers of the latter first.

Delivering average download speeds that average 300 Mbps and peak at 940 Mbps, Verizon's robust fixed wireless broadband offering leaves no doubt that fixed 5G is a viable alternative to traditional home Internet service options. And Verizon's decision to prioritize the deployment of its Wi-Fi 6E router to its fixed 5G customers underscores the extent to which these two wireless distribution technologies complement one another.

Comcast’s Latest Internet Essentials Expansion Includes Pell Grant Recipients

Yesterday, Comcast expanded its “Internet Essentials” program to cover Pell Grant recipients. Comcast will also donate $15 million worth of Internet service and devices, including 25,000 laptops.

These actions are the latest developments in Comcast’s long-standing pledge to connect more Americans. Internet Essentials is Comcast’s decade-old program for boosting high-speed Internet adoption among low-income persons, veterans, and seniors. Eligible subscribers get affordable home broadband up to 50/5 mbps for $9.95 per month. The program has had great success in narrowing the digital divide.

Free State Foundation scholars have previously shared news regarding Internet Essentials 10-Year Progress Report. This report highlighted the success of Internet Essentials and need for continuing its mission. Over the past 10 years, Comcast’s $700 million investment in Internet Essentials connected 10 million Americans to high-speed broadband. During that time, Internet Essentials was responsible for 40% of new Internet subscriptions by low-income families with school-aged children. And also in that report, Comcast committed another $1 billion to connect 50 million Americans over the next decade.

Expanding Internet Essentials to the roughly 7 million annual Pell Grant recipients will contribute to meeting this goal. The COVID-19 pandemic made many Americans deeply familiar with how critical connectivity is to achieving a quality education. And changes to learning methods such as hybrid classrooms will make affordability and adoption efforts more important than ever for education.

Free State Foundation scholars support private initiatives by our nation’s broadband providers to boost adoption and close the digital divide. Internet Essentials is such a successful initiative. Senior Fellow Seth Cooper highlighted the 10-Year Progress Report back in March. Senior Fellow Andrew Long covered expansions to the program in February. And Free State Foundation President Randolph J. May featured earlier Internet Essentials expansions in 2020, 2019, 2018, and 2017.

The latest announcement from Comcast is timely and welcome.

Cable Mobile Wireless MVNOs: 6.5 Million Subscribers and Counting

Over the last few years, Free State Foundation scholars have taken note of the potential competition in the mobile wireless market from entrant cable providers, including Comcast's Xfinity Mobile and Charter Communications' Spectrum Mobile. These cable mobile virtual network operators (MVNOs) combine their broadband network capacity and mobile hotspots with leased spectrum. For a helpful summary of the latest reported numbers, see the July 30 article by Diana Goovaerts in FierceWireless titled "Cable MVNOs add 550,000 wireless subs in Q2." According to the article, cable providers now have a combined total of 6.5 million mobile wireless subscribers. At the end of the first quarter of 2020, there were about 2.5 million combined subscribers. And at the end of the second quarter of 2019, there were about 2.1 million. These cable wireless MVNOs now offer 5G services. At some point, cable wireless MVNOs may be offloading mobile traffic onto their own licensed spectrum in select areas, thereby saving spectrum leasing costs. Expect to hear more about competitive cable MVNOs in the time ahead. 

Broadband Organizations Join Together to Form America's Broadband Future

On May 14, seven broadband providers and trade associations announced the formation of America's Broadband Future, a coalition that "will urge lawmakers to bridge the digital divide by expanding access in rural America, equipping vulnerable communities with resources needed to get connected, and investing in digital literacy initiatives to empower all Americans to thrive in the digital age."

On its home page, America's Broadband Future asserts that:

Unfortunately, some of the broadband policy plans being discussed in Washington, D.C. fall short. They fail to provide the resources necessary to empower and enable vulnerable communities to get connected quickly. And they fail to prioritize those unserved areas of the country that are most in need of major broadband investment. 

Free State Foundation scholars have addressed various shortcomings of the broadband-specific provisions in President Biden's American Jobs Plan in the following Perspectives from FSF Scholars and blog post:

• "Biden Broadband Plan Favoring Government-Owned Networks Lacks a Constitutional Foundation"
• "Biden Broadband Plan: Claims That Broadband Is 'Too Expensive' Are Unfounded"
• "Biden Broadband Plan: Misdirected Broadband Subsidies Hurt Competition and Consumers"
• "'Future Proofing' Subsidized Broadband Would Inflate Consumer Prices"

The founding members of America's Broadband Future are AT&T, Charter Communications, Comcast, Verizon, CTIA, NCTA – The Internet & Television Association, and USTelecom.

Comcast Will Invest $1 Billion to Connect Low-Income Americans with its Internet Essentials Program

For a decade now, Comcast's Internet Essentials program has been bringing affordable broadband connections to low-income Americans. On the occasion of the program's tenth anniversary, Comcast has released a progress report that looks back on the program's accomplishments in closing digital divides. The report coincides with Comcast's announcement that it will dedicate $1 billion to the Internet Essentials program's future efforts bring broadband to 50 million more Americans with limited financial resources.

According to its 10-Year Progress Report, the Internet Essentials program has invested $700 million and helped connect 100 million Americans to the Internet. Some 40% of the growth in broadband adoption in Comcast's service footprint among low-income households with school-age children can be attributed to the Internet essentials program. Comcast also has provided subsidized laptops to 130,000 people with low-income. The program offers the option to purchase a low-cost computer for under $150. 

Since the program started, broadband Internet speeds have increased from 1.5 Mbps in 2011 to 50 Mbps in 2021 – with the discount service price holding constant at $9.95 per month.

Free State Foundation President Randolph May has written about the Internet Essentials program in prior blog posts, including in 2020, 2019, 2018, and 2017.

Comcast's announcement that it will commit $1 billion to connecting low-income students, seniors, community centers, and non-profit organizations, including with WiFi technology, is terrific news. Many more low-income Americans surely will benefit from broadband Internet as a result of this significant private sector investment. Comcast deserves recognition for taking initiative and dedicating resources to bring more low-income Americans online. Here's to the next decade of the Internet Essentials program.