FCC radically changes the broadband game

by Steve Blum • , ,

The FCC made it official: the benchmark for acceptable broadband service is 25 Mbps down and 3 Mbps up. FCC chair Tom Wheeler’s unctuous endorsement of the new standard at CES earlier this month turned into the new national standard yesterday…

Reflecting advances in technology, market offerings by broadband providers and consumer demand, the FCC updated its broadband benchmark speeds to 25 megabits per second (Mbps) for downloads and 3 Mbps for uploads. The 4 Mbps/1 Mbps standard set in 2010 is dated and inadequate for evaluating whether advanced broadband is being deployed to all Americans in a timely way, the FCC found.

Using this updated service benchmark, the 2015 report finds that 55 million Americans – 17 percent of the population – lack access to advanced broadband. Moreover, a significant digital divide remains between urban and rural America: Over half of all rural Americans lack access to 25 Mbps/3 Mbps service.

Wheeler’s rationale yesterday was…

Application and service providers, consumers, and the broadband providers are all pointing to 25/3 as the new standard. Content providers are increasingly offering high-quality video online, which uses a lot of bandwidth and could use a lot more as 4K video emerges. If you were to look at the ISPs marketing materials, most recommend speeds of 25 Mbps or higher if you plan on using multiple connected devices at the same time. Connections under 10 Mbps are marketed as “best for 1 device” and uses like sharing photos or downloading music.

Commissioner Ajit Pai – from the republican side of the panel – thought deeper thinking was needed, and dissented…

98.5% of Americans now live in areas covered by 4G LTE networks (i.e., networks capable of delivering 12 Mbps mobile Internet access). That’s 97.99 million more Americans than just two years ago. And that’s real, concrete progress towards universal—dare I say it—broadband service. Further, one can only smile at the irony of the Commission’s insistence in finding failure the very same month that Google announces expansion of the Google Fiber project to 18 new cities, companies like Dish introduce over-the-top video options that rely on broadband, and bids for AWS-3 mobile broadband spectrum approach $45 billion. At some point, the agency has to take “yes” for an answer when it comes to broadband deployment.

Regardless, 25 down/3 up is the new standard. The immediate effect might be to kill the proposed Comcast-Time Warner-Charter mega merger and market swap. Comcast’s effective monopoly looms larger when AT&T’s VDSL-based service is mostly taken off the table – it doesn’t make the grade. It’ll change the landscape for private investment and public subsidies too. That’s a story that’s yet to be written.