FCC’s Broadband Plan: The Role Of Competition

Updated: The executive summary of the National Broadband Plan is out today, and in addition to the stuff we’ve already covered, we finally know how the FCC plans to treat the issue most responsible for the current state of broadband in the U.S. — the lack of competition. The FCC has proposed collecting more data, which is good, but what matters is how it uses that data, which isn’t outlined in the plan. If the FCC uses the data it hopes to collect as a means to rule and impose conditions on mergers, as well as enforce certain polices around special access reform or sharing fiber, then that’s going to have an impact.
Despite outdated maps showing that most areas are hotbeds of competition, the FCC has no real data on which Internet service providers serve individual homes, what those ISPs charge and what speeds they deliver. We’ve discussed the fallacies of spending $7.2 billion in government money toward better broadband without such data, and have called for such data for years. But now that the FCC plans to get it, what else will they do to enforce competition?
One element is a broadband certification program — or a so-called “Schumer box” for broadband — that gives a defined format for broadband that shows customers what they should be getting for their dollar. So instead of paying $45 a month for speeds advertised as up to 7 Mbps, but which really average out at 3 Mbps, the FCC would require that I get a more accurate assessment of the service, based on reality. Other elements include:

  • Special access reform: the FCC pledges to undertake a review of wholesale competition rules to see if those providing middle mile broadband are being charged competitive rates. It’s clear that in rural areas some are paying ten to a hundred times more for middle mile access.
  • Deliver more unlicensed spectrum, which could be great, but it depends on what spectrum is freed up and would still require investment from tech companies for devices and network infrastructure.
  • Update rules for using microwave for wireless backhaul to boost capacity in urban areas and range in rural areas.
  • Figure out how to get wireless broadband providers to improve mobile broadband coverage everywhere, not just in cities. This might involve intercarrier compensation reform.
  • Change the rules around set-top-boxes to open them up.
  • “Clarify” a Congressional mandate that allows municipalities to provide broadband in their communities. I’m not sure how this would affect existing state and local laws that prevent municipalities from building fiber networks, but depending on the “clarification,” it might help cities avoid costly legal fights over building fiber networks.
  • Make a statement on consumer privacy when it comes to users’ online profiles. The FCC said it will “clarify the relationship between users and their online profiles to enable continued innovation and competition in applications and to ensure consumer privacy, including the obligations of firms collecting personal information to allow consumers to know what information is being collected, consent to such collection, correct it if necessary, and control disclosure of such personal information to third parties.” I’m not sure how far the FCC can go when it comes to ensuring disclosure about my online information, but my hunch is it relates more to schemes where ISPs try to track consumer’s web surfing to sell info to advertisers than to prevent involuntary disclosure of private information through services like Google (s goog) Buzz.

Taken together, better information about broadband speeds and pricing, special access reform, making it easier to build out municipal fiber, and open set-top boxes will likely have the greatest impact on consumers, while the ability to get better data on services could have the most far-reaching effect if the FCC decides to use that information to promote competition. For more details, we’ll have to wait for and read the several hundred pages of the complete plan coming out tomorrow.
Update: Other than competition, the plan also includes a requirement that 100 million homes should have access to 100 Mbps down (which we knew), but also requires 50 Mbps upload speeds — a real coup. We’ve written about the need for better upstream speeds, and by requiring that, the FCC is pushing the cable operators and telcos to allocate far more broadband capacity, especially in cable systems that rely on DOCSIS 3.0. Cable companies and those deploying fiber can reach this goal, but those using copper will be left behind.