Author

Patrick Brogan

Broadband Deployment & Competition Growing: Dedicated Federal Funding Needed to Close Digital Divide

U.S. broadband providers continue deploying and upgrading networks to bring consumers across the nation ever-faster service and competitive choice, according to a newly released analysis of Federal Communications Commission (FCC) data for year-end 2016 from USTelecom and Telcodata. This analysis is based on the same underlying data the FCC uses in its newly released broadband map. While the data show there is widespread deployment and ongoing progress, challenges remain to boosting speeds and coverage in rural areas. We believe the most economically and administratively efficient way to further deploy broadband to America’s most difficult to reach rural areas is distributing federal support through dedicated funding to providers.

As of year-end 2016, 98 percent of Americans had at least one fixed broadband network platform available at any speed and 90 percent had at least two fixed platforms at any speed. As of year-end 2016, 99.6 percent of Americans had at least one mobile broadband network available to them and 96 percent could choose among three or more. See Chart 1. In addition, satellite providers offer national coverage and have recently launched next generation satellites that meet FCC broadband speed standards.

FCC Finds Deployment Reasonable and Timely

The FCC recently issued its 2018 broadband deployment report, finding that broadband is “being deployed to all Americans in a reasonable and timely fashion.” The Commission noted that this finding “does not undermine [its] continued commitment to closing the digital divide… we have much work to do if we are going to continue to encourage the deployment of broadband to all Americans.” In assessing the reasonableness and timeliness of deployment, the Commission chose to look at periodic progress rather than its previous approach, which found deployment to be unreasonable if it was not ubiquitous at the time of its evaluation.

We agree not only with the Commission’s conclusions regarding the state of deployment and closing the digital divide, but also with its approach to measuring reasonableness through progress. Wireline, wireless, and cable providers invest more than $75 billion annually and have spent more than $1.6 trillion since 1996 to deploy competitive networks across the nation, and the Commission is taking action to facilitate deployment. Broadband providers have been among the largest investors in the U.S. economy. At the same time, our analysis, based on the same data the FCC uses in its analysis, confirms the Commission’s finding that broadband is more widely available in non-rural areas than higher-cost, lower-density rural areas.

Government Support for Rural Broadband Deployment Must Be Dedicated

Our analysis emphasizes that there is not a monolithic rural broadband gap. Rather, there is range of diverse rural areas, some with sufficient broadband and some without. Ensuring that every American has the opportunity to connect to the internet through broadband, however, will require government support. Such support, including support for broadband deployment in any national infrastructure package, must be targeted, flexible, and efficient. In particular, policies should target support to specific areas where the economics do not support deployment or upgrades. Governments must not fund wasteful, duplicative overbuilding. Policies must be sufficiently flexible to allow for the most cost effective technological solutions. Finally, it is essential that funding be direct, using a mechanism like the FCC’s Connect America Fund, for the most economically and administratively efficient distribution.

U.S. Broadband Deployment Is Intensely Competitive

Our analysis also examines broadband deployment from the perspective of competition, which is not a focal area for the FCC’s legislatively mandated deployment analysis. U.S. providers have been deploying broadband infrastructure using a range of technologies for more than two decades. As a result, basic underlying competitive infrastructure from multiple providers is available in the vast majority of the country. On top of this foundational infrastructure, broadband providers invest tens of billions of dollars annually to upgrade networks with enhanced technologies, driving a competitive process of ever-expanding network capabilities

The data indicate that competitive deployment is strong and growing, even at higher speeds. As of year-end 2016, 97 percent of Americans had at least one wired broadband network platform available to them and 86 percent had at least two wired options. Competitive availability – defined narrowly as at least two wired providers – at 25 megabits per second (mbps) download (DL) and 3 mbps upload (UL) was 50 percent at year-end 2016, up from 31 percent at year-end 2014 and 25 percent at year-end 2012. Wired broadband at 10 mbps DL and 1 mbps UL was available to 67 percent of households from at least two providers at year-end 2016, up from 63 percent at year-end 2014 and an estimated 59 percent at year-end 2012. See chart below. The results are even stronger when including fixed wireless and mobile wireless in the analysis, as shown in the charts above.

Competition is Spurring Greater Speeds

Due to competition, broadband availability has been growing across all speed categories. From 2010 to 2016, availability of broadband at 10 mbps DL grew from 85 percent to 94 percent. Availability of broadband at 25 mbps DL grew from 49 percent in 2010 to 91 percent while broadband at 50 mbps DL grew from 45 percent in 2010 to 90 percent. Availability of broadband at 100 mbps DL grew from 10 percent in 2010 to 83 percent at year-end 2016. Gigabit consumer broadband, which did not exist in 2010, was available to 11 percent of households at year-end 2016. Mobile broadband tells a similar story. According to our analysis of National Broadband Map (NMB) data, as of mid-2010, fourth generation (4G) mobile broadband was available to less than one percent of Americans. By year-end 2016, 4G wireless to 99.6 percent.

 

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