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FCC Report Claims the Broken Broadband Market Has Been Magically Fixed By Killing Net Neutrality

"To call these numbers a testament to our national success is insulting and not credible."

Karl Bode

Image: USDA

The FCC has released a new report falsely claiming that the agency’s attack on net neutrality is already paying huge dividends when it comes to sector investment and competition.

Unfortunately for the FCC, the data the agency is relying on to “prove” this claim comes from before current FCC boss Ajit Pai even took office and doesn’t remotely support that conclusion.

Under the Telecommunications Act, the FCC is required to issue annual reports on the state of broadband competition and deployment in the U.S. market. Should the FCC find that broadband isn’t being deployed in a “reasonable and timely fashion,” it’s required to craft policies that address the problem.

Unfortunately, when the FCC is under the control of revolving door regulators loyal to industry, they have a tendency to massage the data to help suggest things are rosier than they actually are. After all, it’s easier to justify apathy to a lack of sector competition if the FCC is able to massage data to suggest the problem doesn’t exist.

The problem: these deployments aren’t new, and industry watchers note that they all technically began under the oversight of the previous FCC

As such, when ISPs have undue influence at the FCC, this annual report tends to paint the rosiest scenario imaginable. Said reports do their best to obfuscate what should be obvious to most of us: the United States broadband market is very uncompetitive, resulting in high prices, slower speeds, and historically awful customer service.

The Trump FCC’s latest broadband deployment report keeps this proud tradition alive, concluding that “advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion." That claim comes despite the fact that this same data also shows that two thirds of U.S. homes lack access to 25 Mbps broadband from more than one ISP, resulting in numerous broadband monopolies in markets nationwide.

And thanks to the agency’s historically-unpopular attack on net neutrality everything is now wonderful and only getting better, insists Ajit Pai’s FCC.

An accompanying press release goes on to claim that “steps taken last year have restored progress by removing barriers to infrastructure investment, promoting competition, and restoring the longstanding bipartisan light-touch regulatory framework for broadband that had been reversed by the Title II Order.”

The FCC has repeatedly tried to claim that the FCC’s 2015 net neutrality rules devastated sector investment—despite the fact this is easily disproved by ISP earnings reports, SEC filings, and numerous CEO statements to investors. That hasn’t stopped this FCC from repeating this claim anyway, apparently hoping that repetition forges reality.

"To call these numbers a testament to our national success is insulting and not credible"

The FCC’s report also claims that “the marketplace is already responding to the more deployment-friendly regulatory environment now in place,” but fails to provide any evidence to support this claim.

“Several companies, including AT&T, Verizon, Frontier, and Alaska Communications either commenced or announced new deployments in 2017," the report proclaims. "These new deployments are initial indicators that deployment is likely to accelerate again in part due to our recent efforts."

The problem: these deployments aren’t new, and industry watchers note that they all technically began under the oversight of the previous FCC. All of the examples provided by the agency cite deployments that predominantly occurred in 2017 as the result of obligations attached to mergers or subsidies under the previous Tom Wheeler-run FCC.

Meanwhile, the Form 477 data used to fuel this report was only accurate up until December, 2016. Ajit Pai didn’t even become agency head until 2017, making the idea that this data somehow “proves” the benefit Pai’s attack on net neutrality utterly baseless. That’s something his fellow Commissioners were quick to emphasize in their dissenting opinions.

In a statement, FCC Commissioner Jessica Rosenworcel went so far as to call the FCC’s denial of the obvious “ridiculous and irresponsible.”

“Today, there are 24 million Americans without access to broadband,” Rosenworcel said. “There are 19 million Americans in rural areas who lack the ability to access high-speed services at home. There are 12 million school-aged children who are falling into the Homework Gap because they do not have the broadband at home they need for nightly schoolwork.”

“Ask any one of them if they think the deployment of the most essential digital age infrastructure is reasonable and timely and you will get a resounding "No,” she added. “To call these numbers a testament to our national success is insulting and not credible.”

FCC Commissioner Mignon Clyburn was similarly unimpressed in a statement of her own, noting that 44 million Americans lack access to fixed-line speeds of 25 Mbps or wireless speeds of at least 10 Mbps. She also noted that 66.2 percent of Americans living in rural and Tribal areas still lack access to fixed broadband at speeds of 25 Mbps or higher.

You might recall that the FCC under Wheeler raised the base definition of broadband to 25 Mbps downstream, 3 Mbps up. The move was widely criticized by the broadband industry (and the regulators and lawmakers close to it) because it only emphasized the lack of competition in broadband, particularly at higher speeds.

"Critical progress reports should not rely on the 'hypothetical' when it comes to reaching a conclusion," Clyburn said. "Indeed, the deployments the majority loudly touts pale greatly in comparison to the deployments that occurred in the year after the adoption of the 2015 Open Internet Order. But if you are desperate to justify flawed policy, I think the straw-grasping conclusions contained in this report is for you."

Again, efforts to fiddle with the data to support industry-favored policies are nothing new. ISPs employ all manner of economists exclusively tasked with manipulating data until it paints the rosiest scenario imaginable. Thanks to frequent bouts of regulatory capture, the FCC has a long history of trying to lower the bar to try and deny the obvious.

After all, if the data were to conclude that the United States broadband market is broken and uncompetitive, you might just be pressured to actually do something about it.