Showing posts with label Section 706. Show all posts
Showing posts with label Section 706. Show all posts

Friday, July 28, 2023

The origins of the FCC "speed trap" and U.S. digital exclusion, inequity

Longtime telecom industry observer and blogger Doug Dawson delves into the origins of the “speed trap” U.S. telecom policy has fallen into as it struggles to provide ubiquitous, affordable advanced telecommunications infrastructure. It begins with the definition of the colloquial term to describe advanced telecommunications: “broadband.”
This raises a question of the purpose of having a definition of broadband. That requirement comes from Section 706 of the Telecommunications Act of 1996 that requires that the FCC make sure that broadband is deployed on a reasonable and timely basis to everybody in the country. The FCC interpreted that requirement to mean that it couldn’t measure broadband deployment unless it created a definition of broadband. The FCC uses its definition of broadband to count the number of homes that have or don’t have broadband.
https://potsandpansbyccg.com/2023/07/28/too-little-too-late/

Section 706 is codified at 47 U.S. Code § 1302(d)(1), to define advanced telecommunications capability:
The term “advanced telecommunications capability” is defined, without regard to any transmission media or technology, as high-speed, switched, broadband telecommunications capability that enables users to originate and receive high-quality voice, data, graphics, and video telecommunications using any technology. (Emphasis added).
"Broadband" isn’t defined in the statute. As Dawson notes, the FCC has attempted to define it over the past three decades, distinguishing it from narrowband dialup connectivity commonplace when the 1996 law was enacted. This created sluggish dialup as an anchor, making a commercial market in incremental improvements over dialup sold as an upgrade at a price premium. The more bandwidth, the larger the upgrade and the higher the price.

That market has become firmly entrenched, creating a perception of bandwidth scarcity and digital exclusion leading to what is now termed the “digital divide:” a split between those who can order and afford to pay for sufficient bandwidth to access “high-quality voice, data, graphics, and video telecommunications” referenced in the law and those who cannot – typically those living where the commercial return on infrastructure investment is insufficiently profitable in the broader market context. The commercial market in incremental bandwidth improvements reinforced the FCC policy Dawson describes as both are based on the metric of incremental bandwidth gains.

Supporting this circumstance is the lack of an affirmative policy to modernize copper to fiber to the premises connections. The technology came about two decades before the emergence of the mass market Internet.
First developed in the 1970s, fiber-optics have revolutionized the telecommunications industry and have played a major role in the advent of the Information Age.[7] Because of its advantages over electrical transmission, optical fibers have largely replaced copper wire communications in backbone networks in the developed world.[8]
https://en.wikipedia.org/wiki/Fiber-optic_communication

Legacy telephone companies built on copper developed for carrying analog voice telephone service saw fiber’s potential to deliver high-quality voice, data, graphics, and video telecommunications. By the early 1990s, they planned to replace their legacy copper with fiber to support the rollout of video services. But they opted not to make the transition, instead investing in more readily profitable mobile wireless services according to industry analyst Bruce Kushnick. They included NYNEX, the regional bell operating company created after the 1982 court ordered breakup of AT&T that was rebranded as Verizon. Verizon’s copper to fiber transition was short lived, from 2005 to 2010.

Saturday, August 12, 2017

FCC has few if any options to accelerate modernization of U.S. telecom infrastructure

Maybe Americans don’t need fast home Internet service, FCC suggests | Ars Technica: Americans might not need a fast home Internet connection, the Federal Communications Commission suggests in a new document. Instead, mobile Internet via a smartphone might be all people need. The suggestion comes in the FCC's annual inquiry into broadband availability. Section 706 of the Telecommunications Act requires the FCC to determine whether broadband (or more formally, "advanced telecommunications capability") is being deployed to all Americans in a reasonable and timely fashion. If the FCC finds that broadband isn't being deployed quickly enough to everyone, it is required by law to "take immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications market." (Emphasis added)

The problem is the FCC has few if any effective options to accelerate the modernization of American telecommunications infrastructure. That's because the biggest barrier to private investment in infrastructure to support advanced telecommunications is economic and not a regulatory matter within the FCC's jurisdiction.

Privately owned telecommunications companies must achieve a rapid return on investment to satisfy investors. That's a tall order given infrastructure construction requires copious amounts of capital be invested up front with a long wait until that investment is recouped and generates profit. Their business model is based on selling monthly service bundles and speed tier subscriptions to individual customer premises. It frequently fails to spin off sufficient predictable revenues to earn the required return on invested capital within the investors' time horizon.

That substantially degrades the business case for investing in infrastructure and raises economic risk, in turn leading to market failure and infrastructure deficiencies and disparities. There is little if anything the FCC or any other regulator can do to address that economic reality. It's fundamental to the predominant U.S. model of private ownership and operation of telecommunications infrastructure.

Friday, August 07, 2015

FCC inquiry could set stage to further reduce pressure on telcos, cablecos to deploy last mile infrastructure

Now that the U.S. Federal Communications Commission appears to be whiffing on enforcing Title II’s universal service and anti-redlining provisions relative to Internet service despite deeming Internet service a common carrier utility in a rulemaking earlier this year, it appears to be setting the stage to give big incumbent telephone and cable companies another potential pass on modernizing and building out their last mile infrastructures.

The FCC signaled that possible gambit this week in opening its annual review as required by Section 706 of the Telecommunications Act of 1996 to determine whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely manner.

In previous reviews, the FCC examined advanced telecom infrastructure providing both landline premise as well as mobile wireless and premise satellite service but opted to include only premise landline service in its determination, citing “significant concerns about the quality and reliability of the mobile and satellite service data” as well as factors including latency and usage allowances.

The 2015 review determined infrastructure deployment remained untimely as in previous reviews dating back nearly two decades and that 55 million Americans – 17 percent of the population – lack access to advanced telecommunications services capable of supporting high-quality voice, data, graphics and video.

For its next annual review, the FCC announced an inquiry this week seeking comment on whether mobile wireless and satellite should be included:

While fixed terrestrial broadband service can have advantages for high-capacity home use, mobile broadband has become increasingly important for many uses, including connecting on social media, navigating during travel, communicating with family and friends, receiving timely news updates, and more. In the event mobile broadband is added to the assessment, the FCC is seeking comment on what speed of service should serve as the benchmark for assessing availability. The FCC is also proposing to consider the availability of fixed satellite broadband in its annual assessment of fixed broadband availability.

Such a move could also pave the way for creating a benchmark lower than the new speed standard of 25 Mbps down and 3 Mbps up established in the 2015 Section 706 review since this level of service is not offered by mobile wireless and satellite providers. That would make it easier for the FCC to declare advanced telecom infrastructure is in fact being timely deployed. Doing so would effectively sanction the deplorable status quo that has existed for many years where about one in five customer premises remain unable to obtain premise landline Internet service.

Thursday, November 13, 2014

Section 706 of Telecom Act offers FCC little to address telecom infrastructure deficit

Net neutrality storm engulfs FCC - POLITICO: FCC officials are meeting with congressional staff this week as Wheeler tries to better explain the options on the table to industry players and the public interest community. Across those meetings, the FCC chairman and his aides haven’t tipped their hand about how they want to proceed, according to multiple sources. The officials have given a rundown of the various options, including adopting the utility-style regulation known as Title II, using a weaker authority known as Section 706 or some combination of the two — but failed to lay out a clear path forward, the sources said.

Section 706, found in Title VII (Miscellaneous Provisions) of the Communications Act, isn't really a mandate on telecommunications providers. Rather, it merely affords the Federal Communications Commission authority to issue rules creating incentives to remove barriers to telecommunications infrastructure investment and to promote competition.

The main barrier to wireline Internet infrastructure investment that according to the FCC has left about 19 million American homes without Internet connections is economic, not regulatory. The business models of investor-owned providers typically require relatively quick return on monies invested to build infrastructure. In less densely populated areas, there is greater risk that standard won't be met, extending out the time for investors to break even and begin generating profits. No FCC rulemaking can change those economics.

The FCC provides subsidies to help bridge the gap (the Connect America Fund), but providers have generally spurned them. Instead, they've concentrated capital investments in more densely populated and profitable parts of their service territories and in mobile wireless services.

As for removing barriers to competition, there is little the FCC can do within the existing market-based model for telecommunications service. That's because telecommunications infrastructure is a natural monopoly that due to high cost and risk barriers deters would be competitors from entering the market.