Monday, June 16, 2008

FCC Claims "Reasonable and Timely" Broadband Deployment

On June 12, 2008, the Federal Communications Commission issued its Fifth Report examining the availability of advanced telecommunications capability to all Americans, as required by §706 of the Telecommunications Act. The Report, as did the Fourth Report in 2004, finds that “advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion.”

According to the Fifth Report, the number of high-speed lines in the U.S. has increased from 27.7 million in December 2003 to 100.9 million in June 2007. With regard to residential subscribers, the Commission’s data indicate that the number of high-speed lines increased from 26 million in December 2003 to 65.9 million as of June 2007. The Commission uses the term “high-speed” to describe services with over 200 kbps capability in at least one direction, a speed that is slow in comparison to current broadband technologies. For a discussion of the definition of “broadband” access and the FCC’s methodologies for collecting broadband data, see FCC Expands Broadband Data Collection but Sidesteps Affordability Concerns.

While at first glance these numbers appear to moving in the right direction, the U.S. deployment rate among residential customers, the end user cost, and the “dollar per mbps” value all lag other countries. In his separate dissenting statement to the Report, Commissioner Michael J. Copps had the following insights:

The fact is that your country and mine has never had any cognizable national broadband strategy to get the job done. So while broadband deployment is better than when I came to the FCC -- I would surely hope so! -- and the Commission may separately issue a report today showing improvements in broadband deployment, we’ve been working with one hand tied behind our backs, inhibited by the Commission’s dependence on antiquated methodologies and less than rigorous analysis. I’m happy we’re starting to change our benchmarks, but, my goodness, how late it is!

Just consider the fact that our international competitors deploy 25, 50 and 100 mbps broadband speeds at fractions of what it costs here in the United States. If consumers in Los Angeles or Washington pay $40 per month for a 6 mbps connection while those in London or Tokyo pay multiples less for 50 or 100 mbps, just think of the costs and competition burdens this puts on American consumers and businesses.

Surely broadband has created many good new jobs in the United States. But, you know -- and I haven’t seen any statistics on this -- it wouldn’t surprise me that our lack of a real broadband strategy has helped out-source tens of thousands of jobs, probably more, rather than keeping them right here at home. Again, I don’t know that this is true, but the fact that we can even raise such a question ought to scare us all.

Commissioner Jonathan S. Adelstein added in his separate statement:

Yes, more people have adopted broadband in recent years. But they have adopted broadband faster in other countries with which we compete. Just because a car speeds up doesn’t mean it wins the race, especially if other cars speed up faster. This report fails to admit that while we have improved, other countries have improved at a faster rate, so we are actually falling behind.

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The report unconvincingly attempts to dismiss the international broadband penetration rankings. The fact is the U.S. has dropped year-after-year. This downward trend and the lack of broadband value illustrate the sobering point that when it comes to giving our citizens affordable access to state-of the-art communications, the U.S. has fallen behind its global competitors. We do not wrestle with the question of broadband value, or price per megabit, for which our citizens pay far more than those in many other countries. According to the ITU, the digital opportunity afforded to U.S. citizens is not even near the top, it is 21st in the world. Recent OECD data show the U.S. ranked 11th in the world in price per megabit. Other reports show U.S. consumers pay nearly twice as much as Japanese customers for connections that are twenty times as slow. This is more than a public relations problem, it’s a major productivity problem.

As a result, it is more than just a little bit disingenuous to claim that “advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion.” Where is the national broadband strategy?

Lou Manuta

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