Earlier this month, the FCC released its Internet Access Services Report: Status as of June 30, 2015. The Report summarizes Internet access statistics in the United States for fixed and - to a lesser extent - mobile technologies. The Report counts almost 242 million mobile connections and almost 100 million fixed connections. Yet much of the Report focuses on mobile connections in isolation. Without factoring in competition from multiple mobile providers, the

Report's picture of the market completely fails to reflect the reality of consumer choices for broadband Internet access services. Indeed, data collected by the National Telecommunications & Information Administration (NTIA) indicates that 20% of online households were wireless-only in 2015.

According to the Internet Access Services Report, from December 2014 to June 2015, mobile connections increased by over 8% and fixed connections increased by nearly 2%. And as indicated, mobile connections outnumber fixed by 242 million to 100 million. This means there are nearly two and a half times as many mobile connections as there are fixed connections, with mobile connections growing at a faster rate.


When considering the competitiveness of the broadband Internet services market, the amount of mobile connections relative to other broadband technologies is too voluminous to be ignored. Yet, the Report repeatedly lists broadband connections separately by technology, never even intimating that households have multiple choices from both fixed and mobile broadband service providers.

Oddly, the FCC recognizes intermodal competition from fixed technologies like cable, fiber, DSL - but not for mobile technologies. The Report also provides numbers for broadband access by census block - but only for fixed technologies.

With its Report, moreover, the FCC still fails to acknowledge the ongoing trend that consumers of all income levels are substituting mobile broadband for fixed broadband. Indeed, this trend was recently acknowledged by Guilia McHenry, Chief Economist in the Office of Policy Analysis and Development at NTIA. Based on data collected by NTIA, Ms. McHenry observed: "Mobile Internet service appears to be competing more directly with wired Internet connections." More specifically, the data "shows that the proportion of online households that relied exclusively on mobile service at home doubled between 2013 and 2015, from 10 percent to 20 percent." The growth in wireless-only households for broadband access "appears to have come at the expense of wired broadband connections."

The presence of this ongoing trend involving consumer substitution of mobile broadband for fixed broadband is even more important than the market share or household numbers at any given point in time. And there is no reason to expect this trend to cease anytime soon. Yet absent such additional data about mobile broadband usage, the Report presents a misleading picture of how households and families make decisions regarding their broadband choices.

Further, the Eighteenth Wireless Competition Report indicated that the average LTE download speed based on a series of tests performed in the first half of 2015 was 11.2 Mbps, while the average upload speed was 3.25 Mbps. These are not overwhelmingly fast speeds, but the average download and upload speeds do not necessarily represent the speeds at which Americans have access. (For example, a consumer may have access to 25 Mbps down but may choose to purchase only 10 Mbps down.)

Mobile broadband speeds have also increased significantly since the first half of 2015. As CTIA pointed out in May 2016 public comments to the FCC, LTE speeds are increasing nationwide on account of mobile broadband providers leveraging multiple spectrum bands. Sprint has announced it is deploying tri-band "LTE Plus" mobile network in nearly 200 major markets, with speed capabilities exceeding 100 Mbps. Also, Verizon's "XLTE" - combining network capabilities in its 700 MHz and AWS bands - has begun deployments that will reach over 400 markets with double the bandwidth capabilities available to its LTE subscribers. Needless to say, high-speed mobile broadband is widely accessible to Americans. An accurate analysis of Americans' access to broadband choices must include fixed

and mobile options.

The likely "best" explanation for the FCC's continuing refusal to take mobile broadband substitution seriously is that such refusal fits with the agency's a priori policy preferences. Downplaying the economic effects of intermodal competition in the broadband marketplace and clinging to older, narrower market definitions arguably provides the FCC with a better cover story for imposing new regulations and for keeping old ones on the books.

Certainly, the FCC's "gatekeeper" rationale for asserting Title II regulatory authority over broadband Internet access services in its Open Internet Order (2015) traded on the flawed notion that broadband market conditions are uncompetitive. Similarly, the FCC's current rulemaking proposal concerning special access or business data services depends on a claimed narrow market definition - possibly as narrow as one building location - that excludes mobile broadband altogether.

More should be expected from a supposedly expert regulatory agency than closed eyes in the face of unmistakable market evidence of mobile broadband substitution. It is crucial that the FCC possess accurate data and up-to-date analysis for its regulatory undertakings. And it must reject a myopic outlook that ignores mobile broadband substitution. While the Internet Access Services Report includes much useful data, it ultimately fails in not providing a more accurate picture of the entire broadband market. Going forward, the FCC needs to incorporate intermodal competitive effects into its analyses and rulemaking activities and forthrightly acknowledge the impact of ongoing consumer trends concerning mobile broadband.

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