FCC Report Falsely Claims Killing Net Neutrality Already Helping Broadband Competition

from the rose-colored-glasses dept

For years the FCC has been caught in a vicious cycle. Under the Communications Act, the FCC is required to issue annual reports on the state of U.S. broadband and competition, taking action if services aren't being deployed in a "reasonable and timely" basis. When under the grip of regulatory capture and revolving door regulators, these reports tends to be artificially rosy, downplaying or ignoring the lack of competition that should be obvious to anybody familiar with Comcast. These folks' denial of the sector's competition shortcomings often teeters toward the comical and is usually hard to miss.

When the agency has more independently-minded leadership (which admittedly doesn't happen often), the report tends to accurately show how the majority of consumers lack real options and quality broadband. That was the case under former FCC boss Tom Wheeler, whose agency not only raised the definition of broadband to 25 Mbps (which greatly angered the industry), but actually went out of its way to highlight the fact that two-thirds of American homes lack access to FCC-defined speeds of 25 Mbps from more than one ISP (aka a monopoly).

Unsurprisingly, the Trump FCC is now taking things back in the rose-colored glasses direction. The agency's latest Broadband Deployment Report (pdf) proudly declares that United States broadband is now, quite magically, being deployed in a "reasonable and timely basis." An accompanying press release (pdf) similarly tries to claim that things are only getting better, thanks in large part to Ajit Pai's historically-unpopular attack on net neutrality:

"The progress of broadband deployment slowed dramatically in the wake of the Federal Communications Commission’s 2015 Title II Order that regulated broadband Internet access service as a utility, according to the agency’s 2018 Broadband Deployment Report. However, steps taken last year have restored progress by removing barriers to infrastructure investment, promoting competition, and restoring the longstanding bipartisan light-touch regulatory framework for broadband that had been reversed by the Title II Order, the report says."

You may be surprised to learn that nothing in the Trump FCC's statement here is actually true. SEC filings, earnings reports, and numerous CEO statements easily disprove the claim that the FCC's 2015 rules hurt sector investment. Ajit Pai's FCC has repeatedly and comically claimed the contrary in the apparent belief that repetition forges reality (or at the very least fools the gullible). The only "evidence" the FCC provides to support its claim that killing net neutrality spurred investment is contained in these two sentences:

"For instance, several companies, including AT&T, Verizon, Frontier, and Alaska Communications either commenced or announced new deployments in 2017," the report concludes. "These new deployments are initial indicators that deployment is likely to accelerate again in part due to our recent efforts."

But industry watchers were quick to note that none of these deployments were actually new. In fact, all of them actually began under the leadership of former FCC boss Tom Wheeler, with several of them simply attached to merger conditions or requirements placed on subsidies. Like AT&T's spike in deployment, which was exclusively thanks to merger conditions affixed to its DirecTV acquisition:

"In August 2015, the Wheeler-led FCC awarded AT&T with $428 million in annual funding to bring 10Mbps Internet service to parts of rural America. AT&T was required to deploy broadband to 1.1 million rural homes and businesses over six years to meet its Connect America Fund commitment, and it had to complete the first 40 percent of those deployments by the end of 2017. Thus, the AT&T announcement in January 2018 was simply the fulfillment of a broadband deployment program set in course by the Wheeler FCC."

What's more, the data collected by the FCC is only accurate up until December 2016, when Ajit Pai didn't even take office until the following year. Needless to say, Pai's fellow Commissioners weren't particularly impressed by his rose-colored glasses in their statements of dissent (pdf):

"Critical progress reports should not rely on the 'hypothetical' when it comes to reaching a conclusion," Clyburn said. "Indeed, the deployments the majority loudly touts pale greatly in comparison to the deployments that occurred in the year after the adoption of the 2015 Open Internet Order. But if you are desperate to justify flawed policy, I think the straw-grasping conclusions contained in this report is for you."

Again, none of this is new, and we allow this dysfunction to perpetuate. For decades large ISPs have employed economists to massage data until it helps revolving door regulators deny the obvious: that limited competition results in high prices, slow speeds, and some of the worst customer service in any industry in America. Those revolving door regulators also cherry pick and manipulate data to this same effect, and routinely try and weaken the definition of broadband (by including abysmal satellite service or more expensive and capped wireless) to help deny the obvious.

After all, were FCC data to clearly illustrate how badly American broadband consumers are being screwed by regional monopolies, pay-to-play legislators, and revolving door regulators, somebody might just be forced into actually doing something about it.

Filed Under: ajit pai, exaggeration, fcc, investment, net neutrality