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8/21. The Federal Communications Commission (FCC) released a large
document [181 pages in PDF] titled "Eighth Broadband Progress Report". This
document bears some relationship to the statutory requirement of Section 706 of the
Telecommunications Act of 1996, which requires regular reports in which the FCC makes factual
determinations regarding the "availability of advanced telecommunications capability".
This document, which a divided Commission adopted on a straight party line vote, asserts
that broadband is not yet being deployed in a reasonable and timely fashion.
It states "we conclude that broadband is not yet being deployed to all Americans in
a reasonable and timely fashion. Our analysis shows that the nation’s broadband deployment
gap remains significant and is particularly pronounced for Americans living in rural areas
and on Tribal lands. We find that as of June 30, 2011, approximately 19 million Americans
did not have access to fixed broadband." (Footnote omitted. See, pages 59-60.)
To reach this conclusion, this report construes the statutory language contrary to its
plain meaning. Then, this report presumes that the data fits Chairman Julius Genachowski's
policy goals. That is, with this Section 706 report, and the two prior reports, the extant
policy objectives have driven the FCC's determination of what facts exist, rather than actual data
being employed in making determinations regarding what would constitute sound policy.
However, both of these are time honored practices at the FCC that predate Genachowski's
tenure as Chairman, and transcend party affiliation.
The FCC's underlying statutory authority has not been significantly revised since passage
of the 1996 Act. Chairman Genachowski is endeavoring to expand or create regulatory and
universal service regimes that go beyond FCC statutory authority, but which he and many in
Congress want to have implemented. Hence, he has turned to reconstruing statutory language
to serve new purposes. One of the provisions which he has asserted as authority for a variety
of initiatives is Section 706.
Section 706 of the Telecommunications Act of 1996, which is codified at 47 U.S.C. § 157
notes, provides, in part, that the FCC shall regularly "initiate a notice of inquiry
concerning the availability of advanced telecommunications capability to all Americans
(including, in particular, elementary and secondary schools and classrooms) ... In the
inquiry, the Commission shall determine whether advanced telecommunications capability is
being deployed to all Americans in a reasonable and timely fashion. If the Commission's
determination is negative, it shall take immediate action to accelerate deployment of such
capability by removing barriers to infrastructure investment and by promoting competition in
the telecommunications market." (Parentheses in original.)
This report replaces the term "advanced telecommunications" with wireline broadband
internet access. This report in places confuses the term "availability" with adoption
and affordability. This report also assumes that the term "removing barriers" means
imposing regulatory mandates.
The FCC under Chairmen Kennard, Powell and then Martin issued Section 706 reports that
found in the positive -- that advanced telecommunications capability is being deployed to all
Americans in a reasonable and timely fashion. The FCC under Chairman Genachowski reversed, and
since 2010 has issued three reports that find in the negative.
That this report would again find in the negative was foreordained by
Genachowski's policy objectives. The conclusion of this report, regardless of
the actual facts and data, was to be expected.
For example, in July of 2010 the FCC released its 6th Section 706 report asserting that
broadband is not being deployed in a reasonable and timely fashion. Then, it adopted rules
regulating broadband internet access service (BIAS) providers in December of 2010, asserting
authority under Section 706, and the finding of its July 2010 report.
The December 2010
Report and
Order (R&O) [194 pages in PDF] asserts that Section 706 "authorizes the Commission
to address practices, such as blocking VoIP communications, degrading or raising the cost of
online video, or denying end users material information about their broadband service, that
have the potential to stifle overall investment in Internet infrastructure and limit competition
in telecommunications markets." (See, R&O at Paragraph 120. That R&O is FCC 10-201
in GN Docket No. 09-191 and WC Docket No. 07-52. It is also sometimes referred to as the network
neutrality order and the open internet order.)
Were the FCC to revert back to a positive Section 706 finding, that would undermine the FCC's
asserted legal authority for issuing the BIAS order, which is now under review by the
U.S. Court of Appeals (DCCir).
Similarly, the FCC's massive December 2011
Report and Order
and Further Notice of Proposed Rulemaking [752 pages in PDF] regarding the FCC's universal
service tax and subsidy programs bases its authority, not only upon 47 U.S.C. § 254 (which
actually addresses universal service, but not for broadband), but also upon the assertion
that "Section 706 provides the Commission with independent authority to support broadband
networks in order to ``accelerate the deployment of broadband capabilities´´ to all
Americans". (See, pages 21-22.)
That R&O continues that "We also have independent authority under section 706 of
the Telecommunications Act of 1996 to fund the deployment of broadband networks", because
the FCC's 6th and 7th Section 706 reports found in the negative. (See, pages 25-29.)
The report reaches its conclusion in part by construing advanced telecommunications
service to be terrestrial fixed wireline broadband internet access at download
and upload speeds of 4 Mbps and 1 Mbps. It disregards data on wireless
broadband, as well as increasing data speeds.
The 7th report found that "26 million Americans live in areas unserved by broadband".
This just released 8th report finds that "approximately 19 million Americans live in areas
still unserved by terrestrial-fixed broadband". This report thus finds that a reduction
from 26 to 19 million in one year does not constitute "is being deployed".
Democratic Chairman Genachowski wrote in his statement that "Our
data also show that a significant broadband adoption gap remains -- fewer than
70% of Americans have subscribed to fixed broadband".
Democratic Commissioner Jessica Rosenworcel wrote in her
statement that "nearly one in three Americans do not subscribe to broadband,
citing lack of relevance, lack of affordability, and lack of digital literacy".
Republican Commissioner Ajit Pai wrote in his statement that this "conclusion rests
on a flawed interpretation of the statute" and "sets aside this evidence".
He wrote that the report should not have excluded wireless broadband, and that without this
error, "it would have concluded that 5.5 million Americans -- not 19 million -- lack
access to advanced telecommunications capability".
Pai also wrote that the report "misidentifies the primary barriers to infrastructure
investment and broadband deployment." He stated that investors "indicate that their
caution stems primarily from regulatory uncertainty and in particular their concerns about
whether and how Internet Protocol-based (IP) networks are going to be regulated in the
future."
He noted that the FCC's proceeding regarding reclassifying broadband as a Title II service
"remains open, a sword of Damocles hanging over every broadband investor’s head".
He concluded that "The directive from Congress may not be easy to carry out, but it is clear: Promote
competition. Eliminate regulatory uncertainty. Repeal archaic twentieth-century regulations
that assumed regulated monopolies running copper networks. Empower small businesses, large
businesses, entrepreneurs, and others with capital to invest in broadband infrastructure,
unfettered by government mandate and unshackled from outdated restraints. To be sure, all
of this will not happen overnight. But we should begin immediately down this path by creating
an IP Transition Task Force that would develop a holistic set of recommendations for
facilitating and expediting our transition to an all-IP world. If the private sector came
to the conclusion that the Commission was committed to a deregulatory approach to IP networks
and was serious about eliminating the regulatory uncertainty surrounding the IP transition,
I am confident that broadband infrastructure investment would increase substantially and
quickly."
Republican Commission Robert McDowell, who dissented from the FCC's 6th and 7th Section 706
reports, dissented again. He wrote that "In reality, the growth of broadband deployment in
America, especially regarding the mobile marketplace, has been swift and strong".
He wrote that "the Section 706 process should be used to assess the progress of
broadband deployment in our nation, as Congress intended. Unfortunately, that has not been
the majority’s practice for the past three years. Instead, the majority has used this process
as an opportunity to create a pretext to justify more regulation. The fact that the report’s
closing paragraph heralds the use of Section 706 for the majority’s adoption of unprecedented
regulation of Internet network management, or “net neutrality” rules, underscores my point.
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."
Richard Bennett of the Information Technology
and Innovation Foundation (ITIF) stated in a
release that this report "reaches the erroneous conclusion that we're not
making reasonable progress toward bringing broadband networking to all
Americans. The report's conclusions are not supported by the evidence, do not
conform to the statutory direction of the 1996 Telecommunications Act, and
overlook the non-adoption problem that actually dwarfs the deployment problem by
an enormous degree."
Walter McCormick, head of the US Telecom, stated in a
release that this "report undervalues the extraordinary scope of broadband
deployment that has been achieved and understates the significance of private
sector investment. Certainly the conclusion that broadband deployment to rural
areas remains neither timely nor reasonable suggests that the FCC would be
well-served by acting expeditiously on concerns expressed by the broadband
companies that are seeking to serve rural America. In this regard, Members of
Congress representing some of the rural areas that are the focus of the
commission’s report, and the companies committed to serving those areas, have
implored the commission to get money flowing by investing the Connect America
Fund amounts it has already allocated to rural deployment through timely
approval of currently pending USF petitions. And, both price-cap and
rate-of-return carriers have told the Commission that it needs to act quickly to
provide more clarity and predictability regarding Connect America Fund support
so they can move forward with the multi-year planning and investments necessary
to bring broadband to unserved and underserved areas. We hope that today’s
report will serve as a catalyst for new resolve and speedy Commission action on
these critical matters."
The Free Press praised the FCC's report in a
release. And, the Public Knowledge (PK) praised
the FCC's report in a
release.
The FCC's previous
report [99
pages in PDF] in this series was titled "Seventh Broadband Progress Report". The
FCC adopted and released it on May 20, 2011. It is FCC 11-78 in GN Docket No. 10-159. See
also, story titled "FCC Releases 7th Section 706 Report" in
TLJ Daily E-Mail Alert No.
2,246, May 27, 2011.
Before that, the FCC released a
report [79
pages in PDF] titled "Sixth Broadband Deployment Report" on July 20, 2010. It is
FCC 10-129 in GN Docket No. 09-137. See also, "FCC Releases 6th Section 706 Report"
in TLJ Daily E-Mail Alert No.
2,114, July 29, 2010.
See also, story titled "FCC Releases NOI for 8th Section 706 Report" in
TLJ Daily E-Mail Alert No.
2,283, August 8, 2011.
This report is FCC 12-90 inGN Docket No. 11-121.
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