Free State Foundation Scholars Tell the FCC Broadband Deployment Is More Than Timely and Reasonable Free State Foundation President Randolph May and Senior Fellow Seth Cooper submitted comments yesterday to the Federal Communications Commission in response to the Commission's Eleventh Broadband Progress Notice of Inquiry regarding Section 706's requirement that the Commission determine and report annually on "whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion." The comments demonstrate, without doubt, that broadband is being deployed to all Americans in a "reasonable and timely fashion." The comments focus on the obvious need for the Commission to reorient its analysis to comport with the actual "facts on the ground" relating to broadband deployment.
The complete set of Free State Foundation comments, with the footnotes, is here. Immediately below is the "Introduction and Summary" to the comments, without the footnotes.
These comments are submitted in response to the Commission's Eleventh Broadband Progress Notice of Inquiry regarding Section 706's requirement that the Commission determine and report annually on "whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion." Indeed, without question, broadband is being deployed to all Americans in a reasonable and timely fashion. The focus of these comments is on the need for the Commission to reorient its analysis to comport with the actual facts of broadband deployment.
As of mid-2014, wireline broadband networks with download speeds of 25 Mbps or more had been deployed to 85.3% of the population, and wireless broadband networks with download speeds of 10 Mbps or more had been deployed to 98.2%. Those numbers alone are prima facie evidence of the reasonableness and timeliness of broadband deployment. If anything, as described more fully in the body of these comments, publicly available data reveal that wireline and wireless broadband networks are being deployed not only reasonably and on a timely basis, but ubiquitously and rapidly. Yet in the face of overwhelming evidence of rapid broadband deployment, the Commission's Tenth Report nonetheless made unjustified and unsupported negative deployment findings. Unfortunately, this followed a pattern of prior negative Section 706 findings. But those negative findings owe primarily to the Commission's ad hoc redefinition of what constitutes broadband deployment, not to an accurate portrayal of the facts on the ground. Agency conclusions dependent on repeatedly moving goalposts lack analytical credibility - and they diminish the agency's credibility. Changing definitional standards and simultaneously making findings about deployment based on those changed standards epitomizes arbitrariness. The Commission's goalpost-moving and idiosyncratic defining of broadband appears intended solely to rationalize negative broadband deployment findings under Section 706. Through crafty redefinition of broadband deployment, dramatic progress has been conveniently "reinterpreted" in prior 706 reports, wrongly, to paint lack of progress in broadband deployment. It is sensible that definitions for broadband services be reviewed and revised as technological progress unfolds and everyday consumer expectations shift. But the dynamism of today's broadband market should direct the Commission's analysis away from superficially facile or arbitrary determinations that the market is failing to make progress. Unwarranted negative 706 findings are also harmful to consumers. The Commission uses negative broadband deployment findings to give cover to unnecessary and unjustifiable regulation. To avoid such harms, the Commission must realign its Section 706 analysis to actual competitive conditions in the market, including the substantial deployment of broadband Where markets are characterized by innovation and competition, as is the case with broadband, consumer welfare is enhanced by a policy of market freedom. This market freedom brings about further advancements in products and services. Regrettably, the Commission's reinterpretation of Section 706 has created a conflict of interest. Ever since the Commission reinterpreted Section 706 into a standalone source of regulatory power, its exercise of power over broadband services has come to depend, in ever increasing degrees, on negative findings under Section 706. The most conspicuous examples include the Commission's Open Internet regulations and its order preempting state laws that restrict municipal broadband networks. Perversely, the ostensible legal basis for those policies depends on continued negative broadband deployment findings. A positive finding would be tantamount to pulling the plug on many pro-regulatory, pro-interventionist agency initiatives. The Commission's prior actions lead to the unfortunate conclusion that it is too much to expect the agency will imperil its major policy initiatives by making positive Section 706 broadband deployment findings, regardless of changes in market conditions and broadband deployment. This state of affairs undermines the impartiality of the Commission and likewise undermines the credibility of its Section 706 findings. In order to restore the integrity of its Section 706 inquiry, the Commission should return to its own earlier interpretation of Section 706 as a directive for it to use deregulatory mechanisms to accelerate broadband deployment. The Commission's proposal finally to consider mobile wireless broadband services in its analysis of broadband deployment is welcome - at least in theory. But it would be a serious blunder for the Commission to use its upcoming Eleventh Report to yet again redefine broadband deployment to mean access to both retail wireline and wireless broadband services. This would necessarily result in the Commission finding broadband not deployed to areas in which one or both services, in fact, are actually deployed and utilized to deliver broadband. The Notice's proposal appears to rest on the faulty premise that wireline and wireless broadband are somehow distinct, non-competing, and non-substitutable services. Yet wireline and wireless are platforms for providing the same type of service: broadband. Wireline platforms differ among themselves and likewise differ from wireless platforms. Even individual providers may have unique characteristics in their network management protocols. But those variations do not change the underlying service being offered or their substitutability. Thus, the Notice's proposal appears to be setting up more arbitrary goalpost-moving. It is another instance of manufacturing a negative 706 finding in order to justify regulation of the dynamic broadband market. The Commission should not adopt such a manipulative means of ratcheting up regulation, particularly where it can identify no instances of market power or market failure. Wireless broadband should be incorporated into the Section 706 analysis in a manner that recognizes wireless as a substitute or potential substitute for wireline - in other words, as another provider in the same broadband marketplace. * * * Randolph J. May, President of the Free State Foundation, is a former FCC Associate General Counsel and a former Chairman of the American Bar Association's Section of Administrative Law and Regulatory Practice. Mr. May is a current public member of the Administrative Conference of the United States, and a Fellow at the National Academy of Public Administration. Mr. May is a nationally recognized expert in communications law, Internet law and policy, and administrative law and regulatory practice. He is the author of more than 180 scholarly articles and essays on communications law and policy, administrative law, and constitutional law. Most recently, Mr. May is the co-author, with FSF Senior Fellow Seth Cooper, of the recently released The Constitutional Foundations of Intellectual Property and is the editor of the book, Communications Law and Policy in the Digital Age: The Next Five Years. He is the author of A Call for a Radical New Communications Policy: Proposals for Free Market Reform. And he is the editor of the book, New Directions in Communications Policy and co-editor of other two books on communications law and policy: Net Neutrality or Net Neutering: Should Broadband Internet Services Be Regulated And Communications Deregulation and FCC Reform. The Free State Foundation is a non-profit, independent free market-oriented think tank.
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