Research

Here's the reaction to the FCC's 2019 Broadband Deployment Report.

The first statistical evidence on the effects on labor market outcomes of municipal broadband systems. Using data obtained from the US Census Bureau’s American Community Survey, we apply the Difference-in-Differences estimator, augmented with Coarsened Exact Matching and the wild bootstrap, to quantify the economic impact, if any, of the county-wide government-owned network (“GON”) in Chattanooga (TN) on labor market outcomes. Across a variety of empirical models, we find no payoffs in the labor market from the city’s broadband investments.

To be clear: according to our data collection, which has been rightfully criticized, approximately nine million Americans still lack access to even 10/1 Mbps service, and our finding here does not deny that point. However, our statutory mandate is not only to determine whether all Americans currently have access to advanced telecommunications capabilities, but also whether progress in deploying such services is proceeding at a reasonable and timely pace, and an affirmative response to the latter inquiry is completely consistent with the facts on the ground.

This year’s Section 706 report contains more good news for American leadership in 5G. The FCC’s policies are working. Internet speeds in the U.S. have never been faster: they’re up nearly 40%. The digital divide— the percentage of Americans without access to high-speed Internet access—narrowed by nearly 20%. Providers built fiber broadband out to more homes last year than ever before. The U.S. now has the largest commercial deployment of 5G in the world, and we’re predicted to have more than two times the percentage of 5G connections as Asia.

It is simply not credible for the Federal Communications Commission to clap its hands and pronounce our broadband job done—and yet that is exactly what it does in this report today. By determining that under the law broadband deployment is reasonable and timely for all Americans, we not only fall short of our statutory responsibility, we show a cruel disregard for those who the digital age has left behind.... This report deserves a failing grade. It concludes that broadband deployment is reasonable and timely throughout the United States.

The 2019 Broadband Deployment Report reaches the wrong conclusion. According to the report, the digital divide has narrowed substantially over the past two years and broadband is being deployed on a reasonable and timely basis. The rosy picture the report paints about the status of broadband deployment is fundamentally at odds with reality. While I would like to be able to celebrate along with the FCC’s majority, our broadband deployment mission is not yet accomplished.

The Federal Communications Commission is charged with “encourag[ing] the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans,” by removing barriers to infrastructure investment and by promoting competition in the telecommunications market. For the past two years, the FCC has taken up the mantle; it has made closing the digital divide between Americans with, and without, access to modern broadband networks its top priority.

The Measuring the Economic Impact of Broadband Act (S.1289) would require the Department of Commerce to submit a report to the Congress assessing the effects of broadband deployment on the U.S. economy. The first report would be due two years after the bill’s enactment, with subsequent reports due every two years. Such reports would consider the effect of e-commerce, peer-to-peer commerce (such as Etsy), and the production of digital media on the U.S. economy.

President Trump's tweets don't pack the punch they did at the outset of his presidency. His Twitter interaction rate — a measure of the impact given how much he tweets and how many people follow him — has tumbled precipitously. It's a sign that his strongest communication tool may be losing its effectiveness and that the novelty has worn off. 

The future of competition in high-speed broadband access looks bleak. A vast majority of homes only have their cable monopoly as their choice for speeds in excess of 100 mbps and small ISPs and local governments are carrying the heavy load of deploying fiber networks that surpass gigabit cable networks. Research now shows that these new monopolies have striking similarities to the telephone monopolies of old. But we don’t have to repeat the past; we’ve already seen how laws promoted competition and broke monopolies. In the United States, high-speed fiber deployment is low and slow.