FCC Sets 25/3 as New Broadband Bar
As expected, the FCC today boosted the minimum broadband speed threshold from 4 Mbit/s downstream and 1 Mbit/s upstream (4/1) to 25 Mbit/s downstream and 3 Mbit/s upstream (25/3).
The 3-2 vote along party lines followed the presentation of a new broadband progress report, which was commissioned to determine "whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion." Finding that not to be the case, the report recommended that the Federal Communications Commission (FCC) take action to correct the problem.
Among other conclusions, the broadband progress report specifically took issue with the lack of high-speed connectivity in rural and tribal areas. According to the report, 53% of rural consumers don't have access to 25/3 Internet speeds, and that gap has closed at a rate of only two percentage points over the last year. In tribal lands, the number rises to 63%.
Arguing for a new minimum broadband speed, FCC Chairman Tom Wheeler highlighted the differences between how service providers characterize Internet speeds in their lobbying statements and how they talk about them in marketing materials. Verizon Communications Inc. (NYSE: VZ), for example, filed a statement with the Commission arguing that the 4/1 threshold continues to meet consumer broadband needs. However, on its website, the company advertises that over WiFi, smartphones can use between 15 Mbit/s and 40 Mbit/s, and laptops, televisions and gaming systems can use anywhere from 5 Mbit/s to 75 Mbit/s.
Wheeler didn't pick on just Verizon either. He also called out the nation's three other biggest broadband providers -- AT&T Inc. (NYSE: T), Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Time Warner Cable Inc. (NYSE: TWC) -- for similar discrepancies.
Democratic Commissioners Mignon Clyburn and Jessica Rosenworcel agreed with Wheeler's position and presented their own statements on why the broadband minimum should be raised. Rosenworcel even went so far as to suggest that she thinks the "new threshold should frankly be 100 megabits."
Republican Commissioners Ajit Pai and Michael O'Rielly dissented from the Democratic-led majority. Pai argued that 25 Mbit/s isn't necessary for most consumers when a Netflix Inc. (Nasdaq: NFLX) video typically streams at a rate between 3 Mbit/s and 4 Mbit/s. He also pointed out that the FCC is claiming broadband failure in the same week that complink 2294|Google} announced plans for expanding fiber service to 18 new cities. (See Google Continues Gigabit Expansion.)
O'Rielly declared that the move to a 25/3 threshold "relies on flawed analysis." He noted, for example, that while 4K TV may require 25 Mbit/s to stream, most consumers aren't buying 4K TV today. He also commented facetiously that some people probably believe "that we are on a path to interplanetary teleportation. Should we include the estimated bandwidth for that as well?"
Both Pai and O'Rielly found fault with the new 25/3 threshold specifically when comparing it to the standard that the FCC used last month when voting to spend more than $10 billion to accelerate broadband deployment. In that case, the FCC targeted 10 Mbit/s downstream as the threshold goal. However, Wheeler pointed out that 10 Mbit/s was only meant to be a minimum in that funding exercise, and that there are programs in place to raise speeds further.
Not too surprisingly, ISPs have been against raising minimum broadband speeds ever since Wheeler first proposed the change. Broadbandtrends Principal Analyst Teresa Mastrangelo told Light Reading recently that she believes service providers could have some difficulty keeping up with the new definition. According to Mastrangelo, meeting the new upstream baseline speed could be particularly problematic, and even in the downstream, a rise in speeds will probably also dictate a rise in price. (See FCC's Wheeler Proposes Raising Broadband Definition to 25 Mbit/s and Redefining Broadband Could Vex Carriers.)
The National Cable & Telecommunications Association (NCTA) released a statement after today's FCC decision reiterating the cable industry's position that changing the broadband minimum is a mistake. For the record, the NCTA stated, "While cable network Internet speeds already meet and exceed the FCC’s new broadband description, we are troubled that the Commission majority has arbitrarily chosen a definition of broadband in its Section 706 report that ignores how millions of consumers currently access the Internet."
Regardless of opinion and analysis, however, what's done is now done. The new broadband standard is in place, and the industry will have to adapt.
— Mari Silbey, special to Light Reading