President Joe Biden prepared to sign an executive order which among other things aims to boost broadband competition, but New Street Research analysts warned progress could be limited by a deadlocked Federal Communications Commission (FCC).
The wide-ranging order directs more than a dozen government agencies to address 72 issues related to competition across sectors spanning healthcare, transportation, agriculture and technology. Four provisions are dedicated to addressing broadband competition.
Specifically, the order “encourages” the FCC to prevent internet service providers from striking exclusive broadband deals with landlords, arguing these limit tenant choice and “can effectively block out broadband infrastructure expansion by new providers.” It also urges the FCC to require providers to report prices and subscription rates to the agency and revive efforts to create a “Broadband Nutrition Label” which makes it easier for consumers to compare plans. Two other provisions direct the FCC to limit excessive termination fees charged by internet providers and reinstate net neutrality protections.
In a note to investors, analysts at New Street Research pointed out the order largely aims to bring back policies championed by the Obama Administration which were either reversed or abandoned under President Donald Trump. But they added “none can be adopted until the FCC has a Democratic majority.”
The five-member FCC is currently one head short, with the current four Commissioners evenly divided along political lines. Biden has yet to nominate a fifth Commissioner.
While New Street analysts stated none of the provisions in Biden’s order would “result in the kind of price regulation and overbuilding that investors have been concerned about,” industry groups weren’t thrilled.
USTelecom blasted the order as largely devoid of “context and facts,” adding “the whiff of rate regulation referenced in the White House fact sheet is also concerning…Government regulating prices in one of the country’s most dynamic industries is chilling and counterproductive to our shared goal of connecting everyone, everywhere.” It also derided Biden for “reviving calls for old school utility-style regulations,” a reference to the aforementioned net neutrality provision.
Claude Aiken, CEO of the Wireless Internet Service Providers Association (WISPA), said in a statement the group was “generally encouraged” by the order but insisted the return of net neutrality regulations would “limit consumer choice and competition in the hardest-to-reach areas of our country.”
“Local innovator ISPs have no reason to violate net neutrality principles, nor do they. But heavy-handed utility regulation would undermine the ability of these small innovators to compete in the marketplace, encouraging consolidation to more easily meet compliance obligations,” he wrote.
Internet Innovation Alliance similarly said it “supports the executive order’s aim of protecting consumers and promoting competition in the American economy.” However, the group pushed for broadband to remain a less stringently regulated Title I information service rather than be reclassified as a Title II common carrier service as it had been under previous net neutrality rules.
In the event that net neutrality does make a comeback despite the current situation at the FCC, New Street Research tipped the issue to end up back in the courts.