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FCC ‘706' Report Again Finds Broadband Service Not Being Deployed Fast Enough

Wednesday, August 22, 2012

By Paul Barbagallo  

For the third straight year, the Federal Communications Commission has concluded that “advanced telecommunications capability” is not being deployed to all Americans in a “reasonable and timely fashion.”

In its latest “706” report to Congress, released publicly Aug. 21, the FCC said that 19 million Americans still lack access to a broadband internet access service at their homes or businesses.

Section 706 of the 1996 Telecommunications Act requires the commission to report on whether advanced telecommunications capability, like broadband, is being made available to all Americans in a reasonably expeditious way.

Not surprisingly, the Americans who still lack access to broadband, according to the FCC report, live mostly in rural areas of the country.

But even when such services are available, 100 million people do not subscribe. The agency, as it did in last year's report, found that barriers to adoption such as cost, digital literacy, and concerns about online privacy still remain too high. This problem is still especially acute among low-income Americans, African-Americans, Hispanics, seniors, and residents of Tribal areas, the report said.

Plug for 'Connect America' Efforts.

“Until the commission's 'Connect America' reforms are fully implemented, these gaps are unlikely to close,” the FCC said. Last October, the agency put through a major restructuring plan to convert a roughly $4.5 billion-a-year rural telephone-subsidy fund into a new broadband fund, which will help subsidize the high costs of providing broadband services in rural areas.

As expected, the vote to adopt the report fell along party lines, with Republican commissioners Robert McDowell and Ajit Pai dissenting.

McDowell criticized the chairman's office for using the report as an opportunity to “create a pretext to justify more regulation,” such as net neutrality regulation.

Under section 706a of the act, the commission shall “encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans…by utilizing, in a manner consistent with the public interest, convenience, and necessity, price-cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment.”

Under Section 706b, the FCC must “determine whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion.” If the commission makes a negative finding, it shall take “immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications markets.”

McDowell Sees 'Cynical Cycle of Regulation.'

In his dissent, McDowell said, “Referencing the net neutrality order, the majority says, 'the open internet rules were adopted to ensure the continuation of the internet's virtuous cycle of innovation and investment, and the commission must continue to prioritize those efforts consistent with the mandate of section 706.' In reality, the 706 process has been co-opted by the majority, and used in the course of a 'cynical cycle' of regulation.”

Pai agreed, arguing that the agency's authority under section 706(b) of the statute “lasts” as long as the report is negative.

“If we are willing to set an objective with no intent of reaching it, then I suppose that this is not a problem,” Pai said. “But if we believe instead that data should drive our decisions-not vice versa-then section 706(b) can never be a reliable authority for implementing good policy since we will eventually be forced to concede once again that broadband is being deployed in a timely and reasonable fashion.”

But while again giving broadband deployment a failing grade, the report noted that the private sector continues to invest tens of billions of dollars in broadband infrastructure each year, expanding capacity, increasing speeds on fixed networks and rolling out next-generation mobile services like 4G. The FCC in particular credited the cable industry for expanding networks to provide 100 megabit-plus speeds to 80 percent of the population through what is known as DOCSIS 3.0.


For the FCC's report, visit http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-12-90A1.pdf.

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