US broadband is scarce, slow and expensive. 'Great!' says the FCC

Analysis Fifteen million Americans don't have access to broadband internet. For those that do, the United States has close to the slowest speeds among advanced economies. And for that, Americans pay more than almost anyone else.

Those are what should be the main findings of the annual broadband report from the Federal Communications Commission (FCC), emitted this month. Instead, the regulator has formally found that there is no problem with internet access in the USA, and there is no need for it to use its authority to improve the situation.

Moreover, in a worrying sign of just how far partisan point scoring has overridden the FCC's policy making, the release of the report has been used as a cudgel to criticize the policies of organization's previous leadership; criticism built on threadbare analysis of a single metric.

"Broadband deployment report finds agency actions have restored progress," the official FCC release reads. It starts: "The progress of broadband deployment slowed dramatically in the wake of the Federal Communications Commission’s 2015 Title II Order that regulated broadband Internet access service as a utility, according to the agency’s 2018 Broadband Deployment Report."

It goes on: "However, 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 report says."

The report does say that – literally those words. But it is painfully obvious that such a conclusion was inserted in the report's final editing stages. There is no evidence or analysis to back up the assertion, in large part because the FCC's staff had made no effort to assess the impact of the net neutrality rules – the Title II Order – on broadband deployment.

Leadership

The politicization of what is supposed be an objective report for Congress assessing the rollout of internet access across America is also reflected in accompanying statements from the five FCC Commissioners.

The report concludes that "advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion" – which is the formal language that was drawn up by Congress for the report. That official finding means that the FCC will not use its authority to develop new policies to force internet service providers (ISPs) to offer more, faster internet options.

Commissioner Jessica Rosenworcel called that conclusion - that everything is progressing fine - "ridiculous and irresponsible." Her fellow Democrat on the FCC, Mignon Clyburn agreed and said the report was "biased, flawed, and woefully incomplete."

Rosenworcel: "Today there are 24 million Americans without access to broadband. 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… To call these numbers a testament to our national success is insulting and not credible."

In response, the Republican FCC Commissioners have insisted that the conclusion is correct and have embarked on a semantic back-and-forth over what the word "is" entails and whether the phrase "all Americans" means "all" Americans or simply Americans in general.

The debate goes further down the rabbit hole when Commissioner Michael O'Rielly starts complaining that people have been misrepresenting the whole process. "There has been a tremendous amount of misinformation spewed on this item," he grumbles. "Accusation after accusation was made that the Commission was watering down the 25/3 benchmark, while nothing could have been farther from the truth."

But there was an effort to redefine broadband to a slower speed than 25Mbps up, 3Mbps down – which would have had the knock-on impact of showing much higher adoption standards. It was beaten back.

O'Rielly throws out chaff, unprompted: "There was never any magical conspiracy to snooker everyone into thinking every household had 'broadband' by shifting the benchmark. Pure goofiness."

Slow and expensive

If you strip away the partisan analysis and ignore the fast-flying accusations, what the report does demonstrate is how the United States continues to be poorly served by its ISPs.

In its analysis of how the United States compares to 27 other comparable countries, the report reveals that the US comes 10th in terms of fixed line speeds (up from 11th the previous year), and 24th when it comes to mobile phones – the same as the previous year. Which is extraordinary if you consider that the United States' critical central role in the internet's infrastructure.

When it comes to prices, the US comes 18th out of 23 countries that offer comparable 25Mbps plans. It drops to 23rd out of 25 countries when considering faster 100Mbps plans.

That finding – that the United States is among the most expensive in the world for internet access – is clearly sensitive because the report provides two other models for assessing price.

It has a "fixed broadband price index analysis" but the US still comes 21st out of 29 countries. It then tries a third approach: a "fixed hedonic price index analysis that adjusts for cost, demographic, and quality differences across the countries."

Under that "hedonic" analysis, the US jumps to 7th out of 29 countries – quite a leap. What is in this analysis? From the report: "A hedonic regression provides an empirical summary of how prices vary with the characteristics of a good." In this case it "builds on the price index by allowing adjustment of prices for cost and demographic differences across countries and then predicting broadband prices for each country at the average US values of these variables."

Which is a little vague. Here's more from footnotes in the report: "The hedonic price index also allows an adjustment for observable differences in broadband quality across countries (e.g., speed and usage limits) and generates prices for a set of standardized broadband plans in every country to produce a price index that accounts for all of these factors and is comparable across countries."

Hmmm

All of which sounds a lot like the FCC has comes up with its own fantasy pricing for other countries based on a series of factors that it decides upon and weights itself. Which factors precisely? You can read in paragraphs 29 through to 32 in Appendix C, according to the report. Only one problem: they aren't there; Appendix C ends at paragraph 15.

It's depressing and embarrassing that an agency that is supposed to act as an objective foundation upon which a federal regulator can develop policies to promote nationwide internet access has devolved into yet another partisan squabble in which neither the staff nor the Commissioners can decide what figures they want to see appear.

While the Commissioners bicker among themselves about how many millions of Americans don't have internet access and who's to blame for it, the FCC staff avoids going into areas it should – such as the impact of price on take-up, or the demand for faster internet speeds, or the impact of data caps, or the degree of latency in networks – because it will only stir up more problems.

Meanwhile, 24 million Americans – more than seven per cent of the population - don't have broadband internet. And thanks to low levels of competition in the ISP market, combined with determined efforts by the cable industry to undermine competitors - assisted in part by the FCC - those that do have broadband internet are paying too much for too little.

For some reason, it has become impossible for the federal government to state that simple fact plainly. ®

PS: The governor of New Jersey today signed an executive order that demands ISPs providing internet to the US state's departments must obey net neutrality rules. This follows similar moves by New York and Montana.