Tag Archives: fcc

The worse your broadband, the harder price hikes hit, FCC data says

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Broadband service is getting more expensive, particularly if you’re on the slow side of the digital divide. The Federal Communications Commission just published its 2017 urban benchmark rate survey, which it uses to set prices and data caps for subsidised rural service – via the Connect America Fund, for example – as well as standards for lifeline service.

In 2016 (which is the benchmark year for 2017 rates), urban customers subscribing to packages with download speeds of 10 Mbps, upload speeds of 1 Mbps per second and a data cap of 100 gigabytes per month – in other words, the slowest and lowest service – paid $76.49 per month. That’s $7.33 more than a year before, an 11% increase. Customers with the highest end service in the survey – 25 Mbps down, 5 Mbps up and no data cap – saw their bills go up only $1.52, increasing 2% to $90.76.

As the table above shows, the lower the level of service you buy, the greater the price increase you have to bear, both on an absolute and percentage basis.

One caveat: the benchmarks are based on the prices and terms that are offered by Internet service providers, and not on the average price that consumers actually pay. In other words, customers with low end packages might be – probably are – paying less on average than the benchmark price because when presented with a choice of comparable packages, the microeconomic assumption is that they’ll opt for the cheaper one.

Urban and suburban residents in California can typically – but not always – choose between service from a cable and a telephone company, for example, so they can make that choice. On the other hand, the benchmark rate, which also factors in expensive fixed wireless prices, would be the best that many rural residents might be able to get from the single, federally subsidised provider that serves their area.

No common carrier rules, but draft bill leaves room for net neutrality

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Say goodbye.

A republican-backed bill introduced in congress in 2015 might be the best clue we have regarding where broadband regulation is headed at the federal level. Shortly before the Federal Communications Commission redefined broadband as a common carrier service, and then used that authority to establish a code of conduct for Internet service providers – the network neutrality rules – senator John Thune (R – South Dakota) and representative Fred Upton (R – Michigan) circulated draft legislation aimed at short circuiting that action.

The bill didn’t go anywhere and there was no chance that president Obama would have signed it anyway. But it’s resurfaced recently as the Trump administration and the new republican majority at the FCC start peeling back the net neutrality decision. A story by Ali Breland in The Hill says that Thune is willing to move ahead with a compromise that would leave some restrictions in place.

His 2015 draft is a likely blueprint. It would keep the headline elements of net neutrality, such as requirements that Internet service providers “may not block lawful content, applications, or services” and that they “may not throttle lawful traffic by selectively slowing, speeding, degrading, or enhancing Internet traffic based on source, destination, or content” or “engage in paid prioritization”. All “subject to reasonable network management”.

But that’s about it. The bill would have also banned the FCC from treating broadband as a common carrier service or otherwise expanding its authority over the Internet.

Some in congress – in particular, Marsha Blackburn (R – Tennessee), the chair of a key house subcommittee – would prefer to wait and see what the FCC does. Even Thune’s approach, which he considers to be a compromise that’ll attract bipartisan support, might be too much for other republicans. Whether or not remnants of net neutrality rules remain, it appears increasingly certain that the classification of broadband service as a common carrier utility will not survive much longer.

Mobile carriers buy 70MHz UHF slice for $20 billion

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The auction is over and mobile broadband carriers gained 70 MHz of spectrum in the 600 MHz band, at a cost just under $20 billion. After four cycles of downward bidding by television companies willing to sell their channel assignments followed by upward bidding by wireless companies wanting to buy them, the Federal Communications Commission’s incentive auction ended on Friday.

The downward, selling price auction ended last month, with TV stations willing to accept $10 billion in return for giving up 84 MHz of UHF spectrum. After setting aside 14 MHz for unlicensed use and guard bands, the FCC opened the bidding for the remaining 70 MHz. The final buying price was $19.6 billion, just a bit less than wireless companies were willing to pay for the 80 MHz slice on offer in the third round.

The FCC produced a tidy profit of about $7 billion for the federal treasury, money that’s assumed to be going toward upgrading public safety communications networks. It’ll cost about $2 billion to “re-pack” remaining UHF television channels, in order to produce contiguous mobile broadband frequency assignments. The balance goes towards administrative overhead.

The final bid total was significantly less than hoped. Original estimates were that carriers would pay somewhere in the $30 billion to $40 billion range for 100 MHz. Broadcasters had their eyes on an even bigger payday, starting with a $86 million selling price in the first round, $57 billion in the second and $40 billion in the third – with the amount of spectrum cut each time – before collapsing to $10 billion on the fourth and final try. Carriers, on the other hand, were pretty consistent, bidding a total of $23 billion for 100 MHz initially and walking it back about a billion at a time until the end came on Friday.

The wrangling isn’t over – the next step is to figure out which exactly frequencies TV stations will surrender and which will go to the winning bidders, whose identities haven’t been released yet.

Two nuggets of broadband policy gold offered to Trump administration

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It’s in there somewhere.

So as not to throw the baby out with the bathwater (although it’s a small baby in an ocean of bathwater), it’s worth highlighting a couple of genuine wins in the last gasp “progress report” from the Obama administration’s federal broadband opportunity council.

The acknowledgement by the federal economic development agency (EDA) that broadband infrastructure is eligible for grant funding is particularly valuable, since it’s backed up with cash. EDA is now encouraging local agencies to “incorporate broadband investments (if applicable) into their regional economic development strategies along with other assets such as transportation infrastructure, energy, land use, etc.” Whether or not that beneficence will continue into Donald Trump’s reign is still an open question, but at least it’s standard operating procedure for now.

Contrast that to the USDA’s broadband funding programs, which are largely restricted to incumbents (although that includes electric utilities, under some circumstances) and mostly involve loans, which also favor current monopolists over competitive start ups.

The second small victory comes in the form of a memo from a federal environmental protection agency executive telling staff to try to be efficient when evaluating infrastructure projects. Such efficiency…

Includes allowing entities laying cable to take advantage of trenches opened for EPA-funded projects or projects under EPA oversight where feasible, appropriate, environmentally sound, and consistent with statutory, regulatory or court-ordered requirements.

I appreciate your efforts to ensure that agency employees, grantees, contractors and our state and tribal partners all understand that the EPA supports a “dig-once” approach to environmental and human-health infrastructure investments when projects can also support greater broadband access for the American public.

Yes, there’s an abundant supply of weasel words in there, but the good news is that it leans in to the Trump administration’s regulatory fast track mind set. If anything gets chopped, it’ll be the weasel words.

Too little, too late from the federal broadband opportunity council

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Received and filed.

It’s called a progress report, but there’s not much progress to report. And the safe bet is that the federal broadband opportunity council will go into hibernation, rather than continue with whatever progress it might have made. Nevertheless, the council published a valediction of its efforts as the Trump administration was walking in the door.

The council was formed in 2015, following Barack Obama’s community-broadband-king-for-a-day speech in Iowa in January of that year. It was a federal version of the California Broadband Council (CBC), which likewise attempts to bring high level officials together to coordinate broadband programs and policies. Unlike the CBC, which at least began its life with major decision makers at the table, the federal council leaped straight into mediocrity with a line up of middle managers from the deep bureaucracy.

There were a couple of genuine advances, such as making it much easier to use economic development administration grants for broadband planning and infrastructure projects, and the startling admission from the environmental protection agency that placing a fiber optic cable in an otherwise existing trench might not harm the environment. Might not. More on that tomorrow.

Otherwise, the report is mostly bureaucratic jargon larded with euphemisms for we’ll get around to it later. Consider…

“DOT encouraged…”
“GSA and BroadbandUSA have discussed…”
“BroadbandUSA…is beta testing…”
“ATJ engaged with NSF…although no ATJ-related proposals were selected for funding…”
“The Office of Educational Technology requested funding…”

Even definitive promises came to naught. The report said that “NTIA’s BroadbandUSA website will be relaunched in January 2017″, but here it is February and nothing has changed. Either the new website wasn’t as far along as the report indicated, or the incoming administration hit the delete button.

I’m betting it’s the latter: all the signals coming out of the white house and the FCC indicate that broadband infrastructure development is to be left to the private sector, in particular incumbent monopolists.

Net neutrality on a fast track to oblivion at FCC

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No doubt about intentions.

In his short time as Federal Communications Commission chairman, Ajit Pai hasn’t actually said he’s going to scrap the 2015 decision to classify broadband as a common carrier service, and with it the network neutrality rules that depend on it. But in comments he made last week and in the substance of his big news dump on Friday, it’s clear that he’s moving quickly in that direction.

Among the actions announced late Friday afternoon was the cancellation of investigations into the zero rating practices of AT&T, Comcast, Verizon and T-Mobile. The question was whether offering customers unlimited free data to watch video sold by the carriers while charging fees and enforcing data caps on outside content violates the core principle of network neutrality: that broadband providers can’t use their control – monopoly or otherwise – over Internet access to gain a competitive advantage over other content providers.

In a preliminary finding, released in the final days of the Obama administration, the FCC said yes it does, at least where AT&T and Verizon are concerned. At the time, Pai blasted the report and said change was on the way. And so it was.

Pai also shredded draft decisions that would have regulated wholesale broadband rates and cable companies’ set top box practices, and revived an effort to exempt small and medium sized ISPs from transparency requirements. Like the zero rating investigation, all of those depend on broadband being classified as a common carrier service.

When that decision was made two years ago, then-chair Tom Wheeler labeled it the “Open Internet Order”. No longer. Pai, who speaks carefully, if often verbosely, now calls it the “Title II Order” and FCC staff are following suit. That characterisation is correct. Title II, which is FCC jargon for common carrier regulations, is at the heart of the decision and net neutrality or an open Internet or transparency or wholesale rates are issues that follow from it.

Words matter, particularly in government. Eliminate the common carrier classification and everything else disappears too.

FCC chair Pai buries transparency pledge with a big dump

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Under orders from new republican chairman Ajit Pai, Federal Communications Commission staff issued orders and sent letters rescinding several recent actions on Friday afternoon. In what democratic commissioner Mignon Clyburn blasted as a “Friday news dump” and Pai praised as “revoking midnight regulations”, the FCC cancelled or pulled back…

Clyburn’s characterisation is correct. Whatever else it might be, Friday’s late afternoon announcements are a Friday news dump. She was also right in calling out Pai’s action as hypocritical. The day before, he broke precedent and released draft versions of two relatively minor decisions the commission will consider later this month and said in a written statement

I want this Commission to be as open and accessible as possible to the American people. I want us to do a better job of communicating with those we are here to serve…Now, that’s not to say that the contents of FCC proposals and orders remain secret to everyone. Lobbyists with inside-the-Beltway connections are typically able to find out what’s in them. But the best that average Americans will get is selective disclosures authorized by the Chairman’s Office—disclosures designed to paint items in the most favorable light. More often, the public is kept completely in the dark.

During the transition to the new Trump administration, Pai and others promised to reverse any last minute actions approved under the outgoing, democratic chairman’s authority. No surprise there. But shovelling bare bones cancellation orders out all at once and just before the weekend is the same sort of political spin doctoring that former chair Tom Wheeler habitually indulged in and that Pai rightly slammed, then and now.

FCC backs away from market intervention, consumer roles

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Goodbye to all that.

Wholesale broadband prices won’t be regulated and there will be no committees deciding which apps can bypass set top boxes and directly access cable company bit streams. That’s the practical effect of the decision by new Federal Communications Commission chairman Ajit Pai to pull two controversial proposed rules off of the list of items on circulation and under active consideration by commissioners.

Rules that would have set rates for some wholesale services and allow consumers to watch video programming on their own devices without renting a set top box were on the FCC’s agenda last fall, and nearly came to a vote. Push back on the set top box proposal – from democrats as well as republicans – and, it seems, simple dithering on wholesale broadband regulations delayed a decision, and Donald Trump’s surprise victory stopped it cold. According to a story by Amir Nasr in Morning Consult, Pai exercised his new authority and deep sixed both…

Pai removed the two items from circulation last week “for further review,” along with other items that were circulated by Pai’s predecessor, Tom Wheeler, that never received a final vote, an FCC official confirmed in an email Monday.

“The items could be put back on circulation following modifications,” the official said, adding that the move is “typical” during a change of administration.

My bet is that any draft rules that would have regulated rates and terms for any kind of broadband service – wholesale or retail – are gone for good. That’s the kind of direct intervention in the marketplace – such as it is – that particularly get Pai and his fellow republican commissioner, Michael O’Rielly all riled up.

Set top box rules of some sort do have traction with some congressional republicans, but that doesn’t mean that Pai will take a run at writing them. It can be easily framed as a consumer protection issue, of the sort that could be kicked over the the Federal Trade Commission, as was advocated by the Trump team during the transition. If he truly intends to steer the FCC toward limited, technocratic oversight, rather than the mix-it-up-on-the-playing-field referee’s role that previous chairman Tom Wheeler craved, then Pai just made the first move in that direction.

Don’t subsidise fiber, just give the money to AT&T says FCC commissioner

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The new FCC stands up for broadband.

Broadband has no place any big, federal infrastructure spending bill, according to a key member of the Federal Communications Commission. Michael O’Rielly is the other republican on the commission, in addition to new chairman Ajit Pai, and the more dogmatic of the two.

In a blog post published yesterday, he excoriated previous broadband grant programs, urged colleagues to “salute the work already done by private broadband companies” and endorsed the FCC’s incumbent-centric rural subsidy program, which is designed to accomodate AT&T’s 10 Mbps down/1 Mbps up wireless service. He denigrated the FCC’s current 25 Mbps down/3 Mbps standard and said that 90% of the U.S. population has access to that level of service. O’Rielly advised the remaining 10% – mostly in rural areas, but it also includes inner cities – that “it simply isn’t true that every user within a city, town, village, or hamlet must have or demands broadband at a certain speed, such as downloads of 25/50/100 Mbps”.

He took a swipe at broadband subsidies offered by other federal agencies and, it seems, states like California, where he believes “unfortunately, many broadband programs are designed to be fiber first or fiber only”. O’Rielly made a straw man argument about “dragging fiber to the top of every mountain” and concluded that “alternatively, fixed wireless broadband or satellite may be the most appropriate solution”.

There’s fair criticism in his post of the way some programs have been run. Lack of coordination and overly bureaucratic management are endemic in public broadband subsidy programs – including the FCC’s Connect America Fund. But O’Rielly jumped into Wonderland when he wrote “at a time when so much focus is on reducing undue or improper involvement by D.C. lobbyists and politicians, shouldn’t there be equal concern that any new broadband programs aren’t monopolized by the well-connected?”

Hey, Mike. AT&T stuffs more money into political pockets and gets more money from your beloved CAF program than anyone else. Do the math.

From a big picture perspective, O’Rielly’s post is a manifesto for the coming years. In this and other opinions he’s published, O’Rielly is directly aligned with Trump’s handpicked transition team and mainstream republican dogma. He hasn’t gone rogue. Quite the contrary. He’s made a crystal clear declaration of the new administration’s telecoms infrastructure policy.

Broadband deployment is a local problem, and the FCC is here to help

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Cities and counties will be getting a ton of advice from the Federal Communications Commission. Yesterday, in one of his first initiatives as chairman, Ajit Pai announced the formation of an industry committee charged with identifying “regulatory barriers to infrastructure investment and to make recommendations to the Commission on reducing and/or removing them”.

But he’s not firing up his weed whacker for a run at the FCC’s rulebook. Instead, he’s taking aim at local governments. According to Pai’s statement

One of the first things the [committee] will be asked to do is draft for the Commission’s consideration a model code for broadband deployment. This model code will cover topics like local franchising, zoning, permitting, and rights-of-way regulations. Building, upgrading, and deploying broadband networks isn’t easy, and red tape often can make the task harder than it needs to be. Similarly, many localities that have a strong interest in promoting a digital economy within their borders may not have the resources or expertise to develop and implement deployment-friendly policies. Consumers ultimately pay the price in terms of less access to next-generation services. Our hope is that with a model code approved by the FCC, one that any city could use as a template, the case for broadband deployment would be much easier, especially for communities that seek to proactively encourage it.

There are two ways to look at the Broadband Deployment Advisory Committee’s mission statement. It could be interpreted as a follow on to the community broadband initiatives launched, but not diligently pursued during the Obama administration.

Okay, just kidding.

All you really need to know about the direction the committee will take can be found in the list of the sort of people encouraged to apply for membership. Rural and urban ISPs “that use licensed or unlicensed spectrum, fiber optics, copper wires, or coaxial cables, or any other means to offer high-speed broadband service” get first billing, followed by network builders and lobbyists industry trade associations. You can find local governments tucked in between federal, state and tribal agencies down towards the bottom.

Don’t get me wrong, though. I think developing model policies for local governments to consider is a fine thing to do, and telecoms companies can add valuable insight to the conversation. If the end result is a thick book of draft policy, it could be useful. If not, local governments don’t generally have a problem with ignoring unhelpful advice from Washington, DC or anywhere else.

The danger is that Pai and his colleagues will flex their regulatory muscles and use the book as a template for further federalisation of local broadband planning and policy. There’s already a proceeding underway aimed at wireless deployment, and preemption of state and local governments in that regard, at least, has bipartisan support. Pai is looking at least one step beyond.