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Redefining Broadband Could Vex Carriers

Mitch Wagner
1/15/2015

A newly proposed revision of the Federal Communications Commission (FCC) definition of broadband could spell difficulties for service providers, says an analyst.

FCC Chairman Tom Wheeler last week proposed changing the definition of broadband connectivity to 25 Mbit/s downstream, 3 Mbit/s upstream. The definition is currently 4/1. (See FCC's Wheeler Proposes Raising Broadband Definition to 25 Mbit/s.)

According to an FCC fact sheet on the proposal emailed to Light Reading and other media:

    The FCC set its current benchmark of 4/1 over four years ago. That dated standard is inadequate for evaluating whether broadband capable of supporting today's high-quality voice, data, graphics, and video is being deployed to all Americans in a timely way.

Some 53% of rural Americans lack 25/3 access, and 17% of all Americans, or 55 million people, can't connect at 25/3, the fact sheet says, concluding, "broadband is not being deployed to all Americans in a reasonable and timely fashion."

But service providers would have trouble keeping up with the new definition, says Broadbandtrends principal analyst Teresa Mastrangelo.

"Where I see the issue is in the upstream," she says. Most service providers will struggle to achieve 3 Mbit/s upstream throughput.

25 Mbit/s downstream is also problematic, Mastrangelo says. While service providers can provide that bandwidth, they can't do it as part of the base product.

The higher performance threshold would likely require service providers to raise prices, Mastrangelo says. Not everyone wants that level of broadband performance, and consumers will be unhappy if it results in a price increase.

"My Mom and Dad don't stream television. They don't care about broadband," she says. 5-10 Mbit/s is fine for them. "If they get a 25% increase in their price, they wouldn't be very happy with that."

The impact on service providers will depend on the timeframe for the new definition, Mastrangelo says. "You're looking at a significant jump from 4 megabits to 25. I don't think there should be expectations that the operators will meet this baseline in a year. They'll need more time."


Find out more about broadband on Light Reading's broadband channel.


A 10 Mbit/s downstream threshold would be more practical, realistic, and achievable in a short timeframe. "25 is a bit of a jump," Mastrangelo says.

And it will make a big difference to carriers whether the new speed guidelines are a mandate -- a service that carriers are required to provide -- or simply a definition for research purposes, Mastrangelo says.

Even if the FCC doesn't make 25 Mbit/s a requirement for all services providers, the new speed threshold could affect eligibility for Connect America, a $100 million FCC-run program to fund service providers providing rural broadband. It won't affect the current round, launched over the summer, but it would likely affect future rounds; service providers would be required to commit to the higher speed to receive funding, she says. (See FCC Announces Connect America II Funding.)

— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to [email protected]

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DHagar
DHagar
1/15/2015 | 11:19:33 PM
Re: Vexing
MitchWagner, exactly.  By trying to force the providers to provide the same level you will limit the access, as a result of pricing, etc.  I like the comment, which I agree with, that it will result in raising prices.

I also like the comments that it may result in redefinitions of services.

I think a key impact at the moment is the paralyzing affect this can have on current development and growth, as a result of this new "uncertainty".  Markets don't like uncertainty.
VictorRBlake
VictorRBlake
1/15/2015 | 7:25:19 PM
What is broadband
A very reasonable definition would be 10/2 or perhaps 12/2. There are multiple technologies capable of that level of performance including DOCSIS, xDSL, and both fixed and mobile wireless that can provide that level of service (of course is typically very costly to the consumer for such a wireless service).
brooks7
brooks7
1/15/2015 | 6:00:45 PM
Re: Carriers in a vex, really?
Mitch,

Broadband services are not mandatory.  Internet services are not mandatory.  The FCC would have to make Broadband service a universal service.  It would impact the IOCs that get subsidies (that mostly use it at this point to do FTTH so 25/3 is easy).  It might impact merger conditions as well...of course we saw how well that did for BellSouth/AT&T even for 4/1.

seven

 
doc7878
doc7878
1/15/2015 | 5:18:10 PM
What's in a name?
Is it required the carriers call their product "broadband," or can they simply call it "Internet" instead? If it's just a matter of what they are allowed to call their slower-than-25Mbps service, it seems as though it would not have a significant negative effect to just call the service something else.
kjsing
kjsing
1/15/2015 | 3:18:45 PM
Re: Carriers in a vex, really?
Mitch, my comment was only with reference to the statement made in:

"The higher performance threshold would likely require service providers to raise prices, Mastrangelo says. Not everyone wants that level of broadband performance, and consumers will be unhappy if it results in a price increase."
mendyk
mendyk
1/15/2015 | 3:06:10 PM
Re: Carriers in a vex, really?
The FCC can't require operators to offer 25Mbps service. The main thing this would affect is the federally funded program. And maybe operators will be dissuaded from calling their under-25Mbps service "broadband." But there are other labels they can use for that.
Mitch Wagner
Mitch Wagner
1/15/2015 | 2:46:53 PM
Re: Carriers in a vex, really?
kjsing - What's the soure of your information that the FCC will not make this a mandate?
Mitch Wagner
Mitch Wagner
1/15/2015 | 2:46:07 PM
Vexing
Mastrangelo raises some great points here. In the drive to push broadband out to underserved areas, the government needs to be sure that people receiving broadband actually want it.
kjsing
kjsing
1/15/2015 | 2:15:01 PM
Carriers in a vex, really?
Mastrangelo is yet another misguided voice in the broadband debate. Carriers would have to raise their prices? Really? Let's be clear once and for all. Carriers can continue to provide 4/1 or lower speeds at same price points they do now, just not being able to call it broadband anymore. Why is Lightreading even bothering to publish this nonesense?
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