The FCC's (continued) plan to expand broadband service

Internet access is essential in today's world. If you want to conduct an effective job search, apply to an educational program, find a good doctor, access quality news, or learn anything about the modern world, having access to the internet is imperative. Maybe saying it is essential across the board is too strong, but in today's world, lack of internet access is a high barrier to economic progress.

The Federal Communications Commission (FCC) began a plan to expand broadband access across the country in 2010. (This is not the first time that such a plan has come down from the White House.) Now, their Connect America Fund (CAF), created in 2011, is in "Phase II." The FCC uses the fund to subsidize the costs of expanding broadband coverage to areas that are underserved. Service providers must accept the monetary support in order to receive the subsidy during the six-year implementation of the program. "The FCC has focused on areas that are clearly unserved or underserved by unsubsidized service providers." This means rural America. (In the past, the FCC has also expressed heightened awareness of Native American's need for broadband access.) Service providers in some areas have not accepted the funding and thus are not required to provide broadband in their locale, at least not at FCC standards. Here's a map of "Accepted Areas," where CAF funds are being put to use as of September, 2015.

The broadband service provided under the fund has certain minimum requirements to ensure that access to internet in participating areas is not minimum quality and maximum price. There are requirements for speed, latency, usage allowance, and even pricing. The pricing requirement reads, "Service providers must offer service at rates reasonably comparable to rates in urban areas." This seems like a high bar; it is much more expensive for a provider to bring coverage to sparsely populated areas than to urban centers.

The FCC boldly claims that "Consumers everywhere – both urban and rural – will benefit." I read that as a goal, not a reflection of reality. There is a long way to go before all consumers are benefitting from the program.

On their "Progress Portal" for the CAF, the FCC website links to data reflecting the progress of their five main goals:

• Preserve and advance voice service
• Ensure universal availability of voice and broadband to homes, businesses, and community anchor institutions
• Ensure universal availability of mobile voice and broadband where Americans live, work, or travel
• Ensure reasonably comparable rates for broadband and voice services
• Minimize universal service contribution burden on consumers and businesses.

This spreadsheet shows "High-Speed Internet Penetration by State" between 2014 and 2015. New Mexico was the only state to actually decrease on their metric. Alaska showed the next worse progress, an increase of only .3%, where the margin of error is about 1%. Arkansas, Iowa, and New Jersey also showed less than a 1% increase. World Atlas reports Alaska and New Mexico among the six least densely populated states. Internet access is improving, but the improvements may be slow and disproportionate. That is not surprising.

As far as ensuring "reasonably comparable rates," the Progress Portal says that only 120 service areas are not in compliance. Meaning there are 120 areas where service providers are charging rates incomparable with rates in urban areas.

The Daily Gazette, based out of Schenectady, New York, recently reported that the fund is providing $170 million to support broadband access in Upstate NY. Democratic Senators Schumer and Gillibrand praised the move, expressing hope that it would address a widespread problem of lack of broadband access in rural areas. The article cites that as of December of 2015, 239,000 households did not have access to the benchmark internet speeds set by the FCC. Time will tell how big of an impact this funding will have in rural areas.

In 2020, Phase II will reach its six year mark and the FCC plans to do an evaluation of the program. They plan for a "competitive bidding process" in areas that are still "unserved." Some areas receive coverage from what they call "rate-of-return" carriers, which are not eligible for the Phase II funds, but are subsidized nonetheless.

See this blog post on broadband access in India.