Democracy & Technology Blog Broadband non sequitur

There are 9.2 million households unserved by broadband today, according to the Federal Communications Commission. Accordingly, the commission has erroneously concluded that broadband is “not being deployed in a reasonable and timely fashion to all Americans.”
If the commission finds that broadband is not being deployed to all Americans in a reasonable and timely fashion, then Sec. 706 of the Telecommunications Act of 1996 provides that the FCC “shall take immediate action to accelerate deployment of such capability by removing barriers to infrastructure and investment and by promoting competition in the telecommunications market.”
The Sec. 706 provision was touted at the time as evidence that the 1996 law was in fact deregulatory, despite the law’s size and complexity, and the numerous rulemakings it required the FCC to initiate and conclude. Sec. 706 is another example of “fraudulent inducement” in the legislative process and the role of stirring rhetoric and empty promises in politics.
So now the FCC will corrupt a provision of law intended to reduce the influence of political activists and bureaucrats in the free market, and pervert it instead into a justification to tax telecommunications, regulate broadband and offer subsidies to entities who can be expected to support (or at least not oppose) the Party of Government.
Here’s a critical missing fact: In 1934, Congress directed the FCC to “make available, so far as possible, to all the people of the United States, without discrimination on the basis of race, color, religion, national origin, or sex, a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges…” Guess what? In 2010, the FCC conceded that the average percentage of households with telephone service was only 95.2%. It was 93.6% in the report issued in 2008, 93.1% in the report issued in 2007 and 93.8% in the 2005 report. If the FCC could not achieve 100% of households served by telephone service after 77 years of effort, why should we believe that we can trust this bureaucracy to achieve 100% of households served by broadband.
These reports, by the way, are now difficult to locate as a result of the FCC’s recent redesign of its Web site. If the facts do not support the conclusion, they are not important, right?
According to Chairman Greg Walden of the House Energy and Commerce Communications and Technology Subcommittee,

Even the FCC has confessed that wired broadband is available to 95 percent of Americans and that wireless broadband is available to 98 percent. This doesn’t even account for new satellite broadband offerings, which the FCC has recognized as a potentially efficient way of ensuring universal coverage. Even the small percent of homes that don’t have access is shrinking. Last year the FCC estimated that 8.9 million out of 130 million households did not have high-speed broadband available; using the same analysis, the FCC itself estimates that number has dropped to 4.6 million.

Broadband was deregulated until this administration came along and apparently decided that subsidized and controlled broadband could serve as an important political organizing tool.
The FCC is “working backward” to generate “facts” to support its ideological preference. Its latest report acknowledges but ignores that “the private sector continues to invest tens of billions of dollars in broadband infrastructure each year – $65 billion in capital expenditures in 2010 alone – expanding capacity, increasing speeds on fixed networks and rolling out next-generation mobile services like 4G.” The report’s conclusion that broadband is not ubiquitous at this moment ignores the fact that broadband is nearly ubiquitous and that it is is becoming more ubiquitous every day without government assistance. The recommendations for government intervention are not logically supported by the facts.
The report has a political purpose, to rationalize taxes, regulation and subsidies, i.e., a government takeover of broadband. It comprises part of the Left wing agenda to “transform” America.
The industries the FCC most heavily regulates — telephone, broadcast and satellite — are the most stagnant. The least regulated industries — Internet, wireless and broadband internet access — are the most vibrant.
The FCC is seeking to expand its jurisdiction as a means of institutional survival. What we have here is an obsolete agency seeking relevance so it can justify appropriations and so some of its staff can justify well-paying jobs in the private sector lobbying their colleagues back at an anachronistic bureaucracy.
We do not need an FCC in the dynamic Internet economy. An agency that could not achieve ubiquitous telephone subscriborship after 77 years probably could never guarantee ubiquitous broadband adoption.
(On a nostalgic note, as a field representative to former Oregon Senator Bob Packwood in the late 1980s and early 1990s, I got to spend a lot of time exploring Oregon’s spacious 2nd congressional district which Walden represents, where the scenery is spectacular and the people are sincere. Walden has a great job, and he clearly provides a wonderful service.)

Hance Haney

Director and Senior Fellow of the Technology & Democracy Project
Hance Haney served as Director and Senior Fellow of the Technology & Democracy Project at the Discovery Institute, in Washington, D.C. Haney spent ten years as an aide to former Senator Bob Packwood (OR), and advised him in his capacity as chairman of the Senate Communications Subcommittee during the deliberations leading to the Telecommunications Act of 1996. He subsequently held various positions with the United States Telecom Association and Qwest Communications. He earned a B.A. in history from Willamette University and a J.D. from Lewis and Clark Law School in Portland, Oregon.