The Federal Communications Commission has released the 2018 Broadband Progress Report, the first such report under Chairman Ajit Pai. [1] For the first time since the release of the 2008 report, the FCC’s conclusion on broadband deployment is positive. Specifically, the 2018 Report states that “the Commission is now encouraging the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans.” That positive conclusion, however, comes with the following stipulation – the finding does not undermine the FCC’s continued commitment to closing the digital divide.

To make its determination of whether U.S. broadband deployment is reasonable and timely, the FCC analyzed deployment progress by comparing current (year end 2016) deployment of both fixed and mobile broadband services to deployment in previous years. [2] The FCC examined availability of (1) fixed service alone, (2) mobile service alone, (3) fixed and mobile service together, and (4) fixed or mobile service. Below is some quick background on past broadband deployment reports, following by the highlights of the 2018 Report.

Chairman Pai Breaks From Past Broadband Deployment Reports

Section 706(b) of the Telecommunications Act of 1996, directs the FCC to annually inquire whether advanced telecommunications capability (broadband) is being deployed to all Americans in a reasonable and timely fashion. [3] If the FCC determines that broadband is not being deployed in a timely manner, Section 706(b) requires the FCC to take immediate action to accelerate broadband deployment by removing barriers to infrastructure investment and promoting competition. In the past five reports, the FCC has concluded U.S. broadband deployment is not reasonable and timely. Here is a quick rundown of past FCC broadband deployment reports, starting with the Fifth Report, which was released in 2008 under FCC Chairman Kevin Martin, and was the last report in which the FCC made a positive finding.

Fifth Report (June 2008) – “In this Report, we find, pursuant to the analytical framework established in prior section 706 reports, that advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion.”

Sixth Broadband Deployment Report (July 2010) – “[W]e conclude that broadband deployment to all Americans is not reasonable and timely. This conclusion departs from previous broadband deployment reports, which held that even though certain groups of Americans were not receiving timely access to broadband, broadband deployment ‘overall’ was reasonable and timely.”

Seventh Broadband Progress Report And Order On Reconsideration (May 2011) – “[W]e must conclude that broadband is not being deployed in a reasonable and timely fashion to all Americans.

Eighth Broadband Progress Report (August 2012) – “[W]e must conclude that broadband is not yet being deployed “to all Americans” in a reasonable and timely fashion.”

Order (Ninth) (February 2015) – The FCC issued a Ninth Broadband Progress Notice of Inquiry, received comments, circulated a report internally, but did not formally adopt a ninth report.

2015 Broadband Progress Report (Tenth) And Notice Of Inquiry On Immediate Action To Accelerate Deployment (February 2015) – “[W]e find that, having ‘advanced telecommunications capability’ requires access to actual download speeds of at least 25 Mbps and actual upload speeds of at least 3 Mbps (25 Mbps/3 Mbps).” “We therefore conclude that broadband is not being deployed to all Americans in a reasonable and timely fashion.” “As we did in previous reports, while we consider the availability of mobile and satellite services, we exclude them from our finding of whether advanced telecommunications capability is being deployed in a reasonable and timely fashion.”

2016 Broadband Progress Report (Eleventh) (January 2016) – “We find that advanced telecommunications capability is not being deployed to all Americans in a reasonable and timely fashion.” “We find today that the availability of advanced telecommunications capability requires access to both fixed and mobile services.”

Fixed Broadband Services

To evaluate deployment of fixed broadband services, the FCC relied primarily on FCC Form 477 deployment data. Notably, the report retains the 25 Mbps/3 Mbps broadband speed benchmark for measuring the availability of fixed services. The FCC declined to adopt performance-related benchmarks based on latency or consistency of service. It also rejected calls to consider data usage allowances and pricing, finding such non-performance related benchmarks “fall outside of the scope” of the 706 inquiry. Here are the important statistics on fixed broadband deployment from the 2018 Report:

·       As of year-end 2016, 92.3 percent of the overall U.S. population had access to fixed terrestrial broadband at speeds of 25 Mbps/3 Mbps. (This is up from 89.6 percent in 2015 and 81.2 percent in 2012.)

·       Over 24 million Americans still lack fixed terrestrial broadband at speeds of 25 Mbps/3 Mbps. 

·       30.7 percent of Americans in rural areas and 35.4 percent of Americans in Tribal lands lack access to fixed terrestrial 25 Mbps/3 Mbps broadband, as compared to only 2.1 percent of Americans in urban areas.

·       However, if sluggish satellite broadband service is included, just over 14 million Americans are unserved by fixed 25 Mbps/3 Mbps service.

Mobile Broadband Services (LTE)

Rather than adopt a single speed benchmark for mobile service, the FCC relied on FCC Form 477 data showing 4G LTE coverage with minimum advertised speeds of 5 Mbps/1 Mbps. It then supplemented the information with Ookla actual speed test data at a median speed of 10 Mbps/3 Mbps or higher. The FCC considered a census block to be covered by LTE if there is at least one service provider serving that census block that reports 5 Mbps/1 Mbps as the minimum advertised speed, based on their Form 477 submission. There is one other detail worth noting – the report concludes that mobile broadband services are not full substitutes for fixed services. Below are the important statistics on mobile broadband deployment from the 2018 Report:

·       As of December 2016, over 99 percent of the American population has access to mobile LTE with a minimum advertised speed of 5 Mbps/1 Mbps, according to FCC Form 477 data. (State Broadband Initiative data (maximum advertised speeds of 6 Mbps/768 kbps) show that 89.8 percent had such access in 2012.)

·       FCC Form 477 data show that 98.2 percent of Americans living in rural areas had access to mobile LTE with a minimum advertised speed of 5 Mbps/1 Mbps by the end of 2016. (The percentage of Americans living in rural areas with access to LTE was 62.6 percent in 2012 based on the SBI data.)

Deployment of Fixed Broadband Services and Mobile LTE

The 2018 Report finds that overall, approximately 25 million Americans lack access to both 25 Mbps/3 Mbps fixed terrestrial service and 5 Mbps/1 Mbps mobile LTE. This means that approximately 92 percent of the total U.S. population has access to both fixed terrestrial service at 25 Mbps/3 Mbps and mobile LTE at speeds of 5 Mbps/1 Mbps. (This is up from approximately 89 percent in 2014 and 77 percent in 2012.) However, the data shows that in rural areas, only 68.6 percent of Americans have access to both services, as opposed to 97.9 percent of Americans in urban areas. [4]

Victory Lap: FCC Actions to Increase Broadband Deployment

The last FCC broadband report concluded that deployment was not reasonable and timely, triggering Section 706’s mandate to the FCC to take immediate action to accelerate deployment. According to the 2018 Report, the FCC has since undertaken multiple efforts in response, leading the current FCC to conclude it is now encouraging broadband deployment on a reasonable and timely basis to all Americans. Those efforts include adoption of the Wireline Infrastructure Order and the Wireless Infrastructure NPRM; creation of the Broadband Deployment Advisory Committee; adoption of the Alternative Connect America Cost Model; reforming universal service rules for cost-based rate-of-return carriers; launching Connect America Fund Phase II; adopting state-specific universal service plans; finalizing Mobility Fund Phase II; reforming the Lifeline program; reforming the Business Data Services rules; and adopting the Restoring Internet Freedom Order.

Perspectives on The 2018 Report – Pai Says Deregulation is Working

Often in past broadband progress reports, the FCC majority has used a negative finding to push a predetermined policy agenda. For example, after making the first ever negative conclusion in the 2010 broadband progress report, the FCC pledged to set the National Broadband Plan in motion. In 2015, the Wheeler-FCC raised the definition of broadband to 25/3, and used the negative finding in that year’s report to help justify many forthcoming and ongoing regulatory actions, such as striking down state laws restricting the ability of municipalities to construct and operate broadband networks, imposing Title II regulations on broadband Internet access services, and charging forward with new risky universal service rules. In short, past negative findings have supported new regulation.

With the 2018 Report, however, Chairman Pai has made a break from the past. His mantra is deregulation, and the report helps support the FCC’s deregulatory efforts undertaken during Pai’s first year as FCC Chairman. Right off the bat, in paragraph four, the report mentions the net neutrality rollback – Pai’s signature action so far as Chairman – “With this report we can confirm that was true:  In the wake of the 2015 Title II Order, the deployment of advanced telecommunications capability slowed dramatically.” It goes on to cite other examples, including the wireline and wireless infrastructure orders which lifted copper retirement notice requirements and sought comment on removing barriers to wireless tower siting, respectively. Of course, these deregulatory actions alone won’t bridge the digital divide, and fortunately the FCC has conceded this point. Critics of Pai’s agenda may find a little bit of comfort in the pledge made by the FCC after concluding broadband deployment is on the right track:

That finding, however, does not undermine our continued commitment to closing the digital divide.  Far too many Americans remain unable to access high-speed broadband Internet access, and we have much work to do if we are going to continue to encourage the deployment of broadband to all Americans, including those in rural areas, those on Tribal lands, and those in schools and classrooms.

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[1] Inquiry Concerning Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion, GN Docket No. 17-199, 2018 Broadband Deployment Report, FCC 18-10 (Feb. 2, 2018) (2018 Report).

[2] “The use of the present progressive tense – ‘is being deployed’ – as well as the language requiring an evaluation of whether that deployment is “reasonable and timely” indicates that Congress intended that the Commission evaluate the current state of deployment to all Americans, not a rigid requirement that each and every American be served at this moment.” 2018 Report at ¶ 11.

[3] 47 U.S.C. § 1302(b). The term “advanced telecommunications capability” is defined, without regard to any transmission media or technology, as high-speed, switched, broadband telecommunications capability that enables users to originate and receive high-quality voice, data, graphics, and video telecommunications using any technology.

[4] 2018 Report at ¶ 53. If satellite service were included, the data would show that as of December 2016, approximately 14.9 million Americans lack access to both fixed 25 Mbps/3 Mbps service and 5 Mbps/1 Mbps mobile LTE. Id. at ¶ 54.