Competition/Antitrust

As high-speed, reliable internet access becomes increasingly important in modern life, state leaders are seeking ways to fund projects to expand this vital service. Although the mechanisms that states use are fairly consistent—grants and loans, among others—they have different approaches for distributing funds and encouraging investment. This brief explores the ways in which states support broadband deployment projects and what they aim to accomplish.

Rural broadband was a hot topic for the opening session at the Independent Show, an event put on by cable industry organizations ACA Connects and the National Cable Television Cooperative (NCTC) aimed at smaller cable providers. “It’s something everybody realizes they need to do but traditional finances don’t work,” commented Todd Shurz, President and CEO of IN-based cable and broadband provider Schurz Communications, in reference to the higher costs of deploying broadband in rural areas.

Corporate choices made by AT&T and Verizon, and Frontier Communications’ dire financial condition created the growing divide between relatively modern telecommunications infrastructure in affluent urban and suburban communities and the decaying infrastructure in poor and rural ones. The result is “deteriorating service quality”, “persistent disinvestment”, an “investment focus on higher-income communities” and an “increased focus on areas most heavily impacted by competition.” When addressing service quality going forward, the California Public Utilities Commission should:

The new reality for big tech companies: Scrutiny from regulators and lawmakers has become a constant. For the past few years, American regulators appeared to be lagging as authorities around the world have stepped up their actions to crimp the power of Facebook, Google, Amazon and Apple. The contrast was starkest with European officials, who have passed laws and imposed a series of large penalties against big tech companies. But in recent months, American lawmakers and regulators have also ramped up their activity.

Apparently, the  Federal Trade Commission opened an investigation into Facebook for possible antitrust violations, an early-stage probe that is examining competition in its oldest business -- social media. The agency has already contacted third parties that could aid in the investigation as it tries to understand competitive dynamics. Though the company has made many acquisitions and expanded into new businesses, including messaging, virtual reality and e-commerce, the FTC’s probe is focused on its most long-standing offering -- social networking.

Half of Americans now have access to broadband at speeds of 500 Mbps or above. But less than half of Americans (48.5%) have wired broadband available at $60 or less per month. Availability of 500 Mbps service varies considerably from one state to another. More than 90% of people in Delaware (97%) and the District of Columbia (99%) have 500 Mbps service available to them, followed by Maryland (89%), Utah (87%) and Illinois (85%).

San Francisco is challenging the Federal Communications Commission’s move to override a city mandate that apartment and office building owners share in-use cable wiring with broadband providers upon request. On July 22, the city asked the US Court of Appeals for the Ninth Circuit to undo the commission’s decision to preempt part of a San Francisco law, which bars building owners from interfering with an occupant’s right to choose a communications service.

Federal Communications Commission Chairman Ajit Pai’s Rural Digital Opportunity Fund (RDOF) is the most significant rural infrastructure initiative of our time. At over $20 billion, there is sufficient funding in the RDOF to support the most advanced fiber optic services to every rural home in the nation. The program has the potential to become the Rural Electrification Act of our generation, especially if it fosters the same spirit of local initiative, local ownership and local control.

A CenturyLink fiber expansion plan will see the carrier add 4.7 million miles of fiber across the US and Europe, creating what the company calls the “largest ultra-low-loss fiber network in North America.” CenturyLink reports the first phase of this construction was completed in June, comprising 3.5 million miles of fiber, creating an expansive US inter-city network. The global carrier was able to leverage existing multi-conduit infrastructure for this first phase, connecting more than 50 US.

While the Federal Communications Commission reports that 90 percent of Iowans have access to advanced broadband, others, including Microsoft, argue that measurement of access is grossly overstated, as only about 30 percent of Iowans actually use broadband.  While a state utilities board rules on natural gas and electricity rate increases proposed by investor-owned companies and local officials are accountable for a customer’s water and wastewater bill, Iowa broadband exists largely in the private sector.