CenturyLink (NYSE: CTL) and ILEC industry trade groups wasted no time in speaking out against the FCC's new 2016 broadband progress report, saying that it does not take into account the amount of money service providers are spending to extend broadband services to more communities.
CenturyLink, which is in the process of rolling out 1 Gbps FTTP to businesses and consumers as well as 10/1 Mbps to rural areas via the second phase of the FCC's Connect America Fund (CAF-II), makes it challenging for service providers to comply with the regulator's standards.
"The FCC has so many definitions of broadband that it's hard for us, and for consumers, to keep track of a moving target," said John Jones, CenturyLink, in a prepared statement. "The commission's latest broadband progress report ignores the billions of dollars we invest annually to provide high-speed Internet service, under whatever definition the FCC uses, that our customers want and need."
Echoing a similar sentiment was the USTelecom Association, which said the FCC's findings are just another way to expand their regulatory ambitions.
"It is unfortunate that the Federal Communications Commission's annual broadband report seems to have become a cynical, fact-starved exercise with a conclusion that is contrived to justify a continuing expansion of regulatory authority," USTelecom said in a statement. "Given the $78 billion in annual private sector investment and the billions in USF support that is being used to extend broadband to remote parts of the county, it is ludicrous to say that broadband deployment in the United States is unreasonable -- and no one really believes it."
The report found that while the United States has made a lot of progress in deploying broadband services, 34 million consumers can't get access to 25/3 Mbps connection, the baseline broadband speed.
It also found that the picture is even more disturbing in rural lands and tribal lands where about 40 percent of residents can't get access to the 25/3 Mbps speed benchmark. In addition, the FCC noted that while connectivity for schools has greatly improved since the FCC began modernizing its E-rate program, 41 percent of schools have not yet met the FCC's short-term goals for connectivity capable of supporting digital learning applications.
By contrast, only 4 percent of urban Americans lack access to 25/3 Mbps broadband connections. The FCC said these numbers show improvement from last year's report, when 53 percent of rural residents lacked access, and 63 percent of the residents of Tribal Lands lacked access
But even within the FCC, the response was not surprisingly mixed with Chairman Tom Wheeler and Commissioners Clyburn Rosenworcel, and Pai approving and issuing separate statements, while commissioner Michael O'Rielly dissented.
FCC Jessica Rosenworcel said in her statement about the report that while happy with the progress made in increasing the broadband standard, she suggested the commission should look at increasing the broadband definition further to 100 Mbps with an eye towards Gbps speeds.
"I am pleased that six years ago the Commission had the foresight to change our downstream broadband speed threshold from 200 kilobits to 4 Megabits," Rosenworcel said. "I am glad that last year we upped the ante and changed that threshold to 25 Megabits. I support the continued use of this standard today. But I think we need to go big and be bold. I think our new threshold should be 100 Megabits -- and Gigabit speed should be in our sights. I believe anything short of goals like this shortchanges our children, our future, and our digital economy."
O'Rielly disagreed with the FCC's overall findings, saying that the commission is too focused on just enhancing its ability to put further regulatory burdens on service providers deploying broadband.
"Regardless of whether the standard is 25/3, 10/1, or some other combination of technologies and metrics designed to abuse section 706 and generate regulation, the report continues to show steady progress in connecting unserved Americans," O'Reilly said. "In fact, even at the artificially high and prematurely adopted 25/3 standard, called "table stakes" by some, the number of unserved Americans has dropped from approximately 55 million (17 percent of the population) to approximately 34 million Americans (10 percent of the population) in just one year. The report even concedes that the data are "notably better" than last year. But apparently no amount of progress will ever be good enough for a Commission that is bent on regulating broadband at all cost."
- see the FCC release
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