Universal Broadband

[Commentary] Broadband infrastructure is only a prerequisite for adequate digital inclusion, not a sustainable solution in itself. Research examining the economic impacts of broadband access in rural regions in the US found a stark difference in economic outcomes when ‘access’ was defined as the availability of broadband infrastructure versus ‘access’ being defined as the adoption of a residential broadband connection. Broadband infrastructure alone provided only minimal economic benefits to households and regions, while increased broadband adoption was linked to individual-level and community-level economic improvements.

The cost of fixed broadband subscriptions is often cited as the single most important factor in hindering broadband adoption in areas where the infrastructure is available. However, research suggests that while affordability is certainly key, there are also other factors that should be considered. One well-cited cross-country analysis of cultural factors affecting broadband adoption lists lack of understanding of the services and content that can be accessed online as one reason individuals in the US may not adopt high-speed broadband, as well as an actual insufficiency in online content relevant to a particular community. To truly equalize the digital playing field, we need to carefully consider the factors affecting individuals’ ability to gain high-speed broadband access once the infrastructure becomes available in their geographic region. The findings cited here speak to the importance of investments in educational programs and services addressing digital literacy, content creation, and other aspects critical to sustainable broadband adoption.

[Jana Wilbricht is a Ph.D. Candidate in Communication Studies at the University of Michigan, and worked with NDIA during the summer 2017 as a research fellow of the Consortium on Media Policy Studies (COMPASS).]

During my confirmation hearing last month, I spoke about the important role that tech and telecom policies can play in creating jobs, spurring investment, and growing the economy for the benefit of all Americans. It is one of the reasons that I am focused on policies that will promote broadband deployment. Whether it is the workers that manufacture and deploy broadband infrastructure, the app economy that runs over high-speed networks, or the businesses that use these connections to reach customers around the world, I testified about the ability of broadband to harness the talents of all Americans, to create good-paying jobs, and to help drive our nation’s economic growth.

There are many small business benefits of rural broadband, argues ACT – The App Association in a well-researched blog post that cites numerous real-world examples of those benefits. ACT, an association of small technology firms, wrote the blog post to advocate for TV white spaces (TVWS) broadband, but the benefits cited would apply to other high-speed broadband technologies as well. The business benefits of rural broadband that ACT references include:
Small and medium businesses that access global markets over the internet have a survival rate of 54%, which is 30% higher than for SMBs that are not internet-connected, according to the World Economic Forum.
30% of companies that sell goods online through Etsy are based in rural areas – and considering that $2.84 billion in goods were sold through Etsy last year, those rural retailers apparently are generating considerable revenues online. Etsy sellers generally are small businesses, which the company refers to as entrepreneurs and “internet-enabled microbusinesses.”
Small businesses create roughly two thirds of jobs in rural America, according to the U.S. House of Representatives small business website, highlighting the important economic benefits those businesses could generate, provided that they have high-speed broadband available to them.

Attorney Daryl Parks has filed a formal Federal Communications Commission complaint against AT&T on behalf of three African American low-income residents of Cleveland (OH) alleging digital redlining. The complainants--Joanne Elkins, Hattie Lanfair, and Rochelle Lee--allege that "wealthier and predominantly white areas have gotten premium upgradable high speed broadband access at bullet speed," while the three complainants "receive slow speeds at a rate as low as 1.5 mbps downstream or less, although they pay AT&T for high speed access."

They say that is unjust and unreasonable discrimination in violation of the Communications Act. They also allege that is part of a pattern of discrimination by AT&T nationwide, relying on a study by the National Digital Inclusion Alliance. The parties say they met with AT&T in July, which "flatly" denies that it is redlining, hence the suit. The complaint concedes AT&T offered to expand a 5G wireless broadband pilot program, but says that is not sufficient. Parks and company want the FCC to investigate the charge, including holding a hearing, which would likely be before the FCC's Administrative Law Judge, and they want damages.

The National Association of Broadcasters is firing back at a letter from tech executives who wrote the Federal Communications Commission in support of reserving broadcast band channels, so called "white spaces," for unlicensed device use. A group of tech company execs banding together as Voices for Innovation Aug 22 raised their voices in support of a proposal by Microsoft that the FCC reserve channels in the white spaces of the broadcast TV band for unlicensed devices as a way to promote rural broadband deployment. NAB is no fan of the plan, and made that clear in its response to the tech exec letter on TV white spaces. That letter talked up the use of the unlicensed spectrum to get broadband to 34 million more homes. Broadband deployment is a signature issue for the FCC under new chairman Ajit Pai.

Major home Internet providers in the US don't typically expand into each other's territory, but this week, AT&T said it is launching high-speed Internet in parts of New York City and other major metro areas outside of its traditional wireline footprint. The new service is for apartment and condominium buildings, so don't expect to get it if you live in a single-family house. It's also only available in cases where AT&T has gotten access into buildings, which is often a problem for competing ISPs because of exclusive arrangements between providers and landlords. But for some consumers, the new AT&T launch could provide some much-needed competition.

AT&T's new deployment uses G.fast, a technology that relies on fiber deployments into neighborhoods and copper wires to make the connection inside each building. But instead of old phone lines, AT&T said it is using coaxial cables to make the final connection to consumers. "G.fast provides Internet access to apartment and condo units over existing coaxial cables," AT&T said. "This can minimize disruption for current residents because there's no need to place new wiring in each residence."

[Commentary] The Rural Electrification Administration (REA) built on the efforts of another New Deal project. The Tennessee Valley Authority was among the very first creations of President Franklin Roosevelt’s administration. The TVA had several purposes, including navigation improvements and flood control, but among its biggest was generating electricity for some of the poorest sections of the country. Everyone knows about the high-speed internet deficit, so why hasn’t anything like a TVA for the internet been created?

One answer is that Congress has been controlled by politicians who have vilified all government programs and who do not want to create new ones. The bigger problem is that the very people who would benefit from rural broadband keep voting for those same politicians and things are even worse at the state level. Dozens of rural communities have tried to set up internet co-ops, on the model of the REA, but in response nearly two dozen states have passed laws making it nearly impossible to do so. Most of these states are controlled by the same kind of anti-government legislators who run Congress and all of them have been lobbied heavily by the same telecommunication companies that have abandoned rural internet users. But as long as rural Americans keep sending those politicians to Washington, or to the statehouse, rural America is going to remain stuck in the dial-up age.

[Steven Conn is the W. E. Smith Professor of History at Miami University in Oxford, Ohio]

Cable companies were mostly up and the top telecommunications companies all were down in high-speed Internet subscriptions during the second quarter 2017. In all, the top 14 providers – companies that serve about 95 percent of the market – netted almost 230,000 new US broadband subscribers, according to an assessment by the Leichtman Research Group. “Cable companies added about 3.1 million broadband subscribers over the past year, while Telcos had net losses of about 550,000 broadband subscribers,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group. “At the end of 2Q 2017, cable had a 64% market share vs. 36% for Telcos. The broadband market share for cable is now at the highest level it has been since the first quarter of 2004.” The cable industry still dominates, with 59.9 million broadband subscribers compared to the telcos’ 34.2 million.

We measure households’ willingness-to-pay for changes in key home broadband Internet connection features using data from two nationally administered, discrete choice surveys. Both surveys include price, data caps, and download and upload bandwidth, but only one includes latency. Together, these surveys allow us to measure tradeoffs between bandwidth and other connectivity features such as price and data caps, and perhaps most notably, provide the only empirical evidence to date of tradeoffs between bandwidth and latency. We find that households' valuation of bandwidth is highly concave, with relatively little added value beyond 100 Mbps.

For example, households are willing to pay about $2.34 per Mbps ($14 total) monthly to increase bandwidth from 4 Mbps to 10 Mbps, $1.57 per Mbps ($24) to increase from 10 to 25 Mbps, and only $0.02 per Mbps ($19) for an increase from 100 Mbps to 1000 Mbps. We also find households willing to pay about $8.66 per month to reduce latency from levels obtained with satellite Internet service to levels more common to wired service. Household valuation of increased data caps is also concave as caps increase from 300 GB to 1000 GB, although consumers place a significant premium on unlimited service. Our findings provide the first relative valuation of bandwidth and latency and suggest that current U.S. policy may be overpenalizing latency relative to reductions in bandwidth and data caps. For example, we find that in its CAF Phase II Auction, the FCC is imposing a bidding penalty for latency that is about five times higher than what our WTP estimates suggest it should be relative to bandwidth offered.

The Lifeline Connects Coalition met with Federal Communications Commission Wireline Competition Bureau staff on August 10, 2017 to discuss the Lifeline National Eligibility Verifier. The Coalition discussed improvements to the timing of subscriber proof of eligibility for migration to the National Verifier, the recent decision not to provide a service provider application programming interface to the National Verifier, and the proper interpretation of the June 29, 2017 Public Notice regarding service provider liabilities under the National Verifier. The Coalition also discussed its Petition seeking reconsideration of minimum service standards and the GAO Lifeline Report.