FCC Says Gutting ISP Oversight Was Great For Broadband

By Karl Bode, Feb 21 2019 | Original Motherboar article here.

Ajit Pai's FCC insists that ignoring consumers and gutting oversight of major ISPs dramatically boosted network investment. Reality suggests something else, entirely.


Chairman @ajitpaifcc on Feb 19.

This report shows that our approach is working. But we won’t rest until all Americans can have access to broadband and the 21st century opportunities it provides to communities everywhere."

The FCC this week proclaimed that broadband connectivity saw unprecedented growth last year thanks to agency policies like killing net neutrality. The problem with this is that it doesn’t appear to be true. Consumer groups like Fight For the Future were unsurprisingly unimpressed by the FCC’s victory lap.

Fight For the Future

“From what we can see, this report looks like it was written by a telecom lobbyist and bears no resemblance to what Internet users are experiencing in their everyday lives,” said the group in a statement. “U.S. residents are already paying more money for less Internet than nearly anywhere in the world, so it’s awfully strange that the FCC’s media sheet said nothing about price and competition.”

By law, the FCC is required to submit a periodic report on the state of U.S. broadband, noting whether or not affordable internet is being deployed on a “reasonable and timely basis.”

The FCC didn’t release its full data to the public, but it did issue a press release citing some very specific statistics agency boss Ajit Pai claimed proved his agency was curing the “digital divide.” Among the claims the FCC uses to support its position is that the availability of 100 Mbps broadband connections grew by nearly 20 percent in 2018, from 244.3 million to 290.9 million.

But . . .

  • The lion’s share of these improvements are courtesy of DOCSIS 3.1 cable upgrades, most of which began before Pai even took office and have nothing to do with FCC policy.

  • Other improvements are likely courtesy of build-out conditions affixed to AT&T’s merger with DirecTV, again the result of policies enacted before Pai was appointed head of the current FCC.

Meanwhile, last year’s FCC report (showcasing data up to late 2016) showed equal and in some instances faster growth in rural broadband deployment—despite Pai having not been appointed yet.

The broadband industry’s biggest issue remains a lack of competition. That lack of competition results in Americans paying some of the highest prices for broadband in the developed world, something the agency routinely fails to mention and does so again here.

With many of the nation’s phone companies refusing to upgrade or even repair their aging DSL lines, cable giants like Comcast are securing a greater monopoly over faster broadband across huge swaths of the country. That in turn is resulting in higher rates and little incentive to improve terrible customer service. The telecom lobby works tirelessly to keep this status quo intact.

Still, Pai was quick to take a victory lap in the agency release.

For the past two years, closing the digital divide has been the FCC's top priority, Pai said yesterday. "We've been tackling this problem by removing barriers to infrastructure investment, promoting competition, and providing efficient, effective support for rural broadband expansion through our Connect America Fund. This report shows that our approach is working.”

One of those supposed “barriers to broadband investment” were the former FCC’s net neutrality rules designed to keep natural monopolies like Comcast from behaving anti-competitively. Polls repeatedly indicate those rules had the overwhelming bipartisan support of the public.

The idea that net neutrality somehow stifled sector investment has been a common refrain for the Pai FCC. As has the claim that eliminating the rules boosted said investment. That same claim is also frequently mirrored by claims from telecom lobbying organizations like US Telecom, who routinely insists the U.S. broadband market is fiercely competitive.

“Overall, capital expenditures by broadband providers increased in 2017, reversing declines that occurred in both 2015 and 2016,” the FCC claimed, again hinting that the repeal of net neutrality directly impacted CAPEX and broadband investment.

One problem with that claim is that the FCC’s latest report only includes data up to June 2018, the same month net neutrality was formally repealed. As such the data couldn’t possibly support the idea that the elimination of net neutrality was responsible for this otherwise modest growth.

Another problem: that claim isn’t supported by ISP earnings reports or the public statements of numerous telecom CEOs, who say net neutrality didn’t meaningfully impact their investment decisions one way or another. Telecom experts tell Motherboard that’s largely because such decisions are driven by a universe of other factors, including the level of competition (or lack thereof) in many markets.

Former FCC lawyer Gigi Sohn told Motherboard via email:

“The unsubstantiated allegation that Title II in particular had a negative effect on broadband investment was wrong when embraced by Pai in 2017 and it’s still wrong — investment decisions are based on factors like competition, the economy and changes in technology,”

The FCC did not respond to a request for comment seeking clarification on its claims.