After upgrading its standard definition of broadband to 4 Mbit/s, the Federal Communications Commission (FCC) says in its annual broadband deployment report that the prospects for getting high-speed Internet access to 14 to 24 million Americans in poor or rural areas that lack it are “bleak.”

When the FCC began issuing its annual broadband deployment reports in 2004, it set the standard for broadband Internet access at 200 Kbit/s. In the report it issued Wednesday, the commission says that it doesn’t consider a household a broadband-connected home unless it has a high-speed Internet connection with a minimum download speed of 4 Mbit/s and upstream speed of 1 Mbit/s. (See FCC: Up to 24M Lack Broadband Access.)

“This is a minimum speed generally required for using today’s video-rich broadband applications and services, while retaining sufficient capacity for basic web browsing and email,” the FCC said in the report, adding that the standard will “evolve over time.”

The FCC said that it found that up to 24 million Americans don’t have broadband Internet access under the new standard. It used the findings to call for Universal Service Fund reform and as additional basis for its pursuit of a broader National Broadband Plan.

The Commission also called for “innovative approaches to unleashing new spectrum, and removal of barriers to infrastructure investment.”

Two FCC commissioners said they opposed the findings of the report. Republican commissioner Meredith Baker took issue with the 4-Mbit/s standard, noting that the report found that half of Americans with access to such speeds opt for slower and less expensive high-speed Internet packages. Baker also complained that the report focused “almost exclusively on terrestrial broadband options,” and didn’t address satellite broadband, 3G, and 4G wireless Internet products.

Fellow Republican commissioner Robert McDowell noted in his dissent that the report focused too much on subscriber counts instead of deployment of high-speed Internet services, and the availability of broadband. “Collecting granular data, including subscribership numbers, is important. But subscribership data does not equate to the availability of broadband, which is what Congress requires the Commission to assess,” McDowell said.

The National Cable & Telecommunications Association (NCTA) is still reviewing the report, spokesman Brian Dietz said.

The American Cable Association (ACA) said MSOs have been pulling their weight in rural areas and called on the FCC to alleviate capital-sapping regulations so more can be allocated toward broadband deployment.

"The broadband deficit identified by the FCC would be a lot worse if ACA members hadn’t been aggressive broadband deployment leaders over the past decade in rural America," said Matthew Polka, president and CEO of the org, which represents many tier 2 and tier 3 MSOs. "The FCC can help ACA members allocate their scarce capital more effectively on behalf of consumers’ broadband needs by minimizing costly and burdensome regulations in other areas, such as retreating from strict reliance on expensive CableCARD-enabled set-top boxes when more affordable options would serve cable subscribers better."

Both AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) said they disagreed with the findings of the report. AT&T senior vice president of regulatory affairs Bob Quinn wrote in a post on the company’s blog that the report found that 7 million homes without access to wireline broadband service all have access to satellite-based broadband. “Some of those areas today receive thousands of dollars annually per line to support the provision of voice service,” Quinn added.

Verizon senior vice president for regulatory affairs Kathleen Grillo said the FCC’s conclusion is “hard to understand.”

“It makes no sense that, after the National Broadband Plan concluded that 95 percent of Americans have access to wireline broadband, the FCC majority now suggests broadband deployment is not reasonable and timely,” Grillo said in a statement.

Free Press research director Derek Turner cheered the findings of the report. “The facts present a sobering reality of our broadband problem. We pay far too much for far too little, and the lack of meaningful competition among Internet service providers leads to delayed investment and slow technological progress,” Turner said, in a statement.

— Steve Donohue, Special to Light Reading Cable