TR Daily Fixed-Mobile Substitutability Debated in Section 706 Comments
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Tuesday, September 18, 2018

Fixed-Mobile Substitutability Debated in Section 706 Comments

Among the sharp lines of division among parties offering input for the FCC’s next “section 706” report is whether the FCC should treat mobile broadband as a full substitute for fixed wireline broadband in making its determination of whether advanced telecommunications capability is being deployed in a reasonable and timely fashion.

Parties were responding to a notice of inquiry in General docket 18-238 seeking input for the FCC’s 14th report on the deployment of advanced telecommunications capability, commonly known as a section 706 report, after the provision in the 1996 Telecommunications Act that mandated the reports, which the FCC has called by various names through the years. It is referring to the current iteration as a broadband deployment report.

The NOI proposed to use much the same approach to analyzing deployment as it is did in the last report, including a focus on progress, rather than looking at whether ubiquitous deployment has been fully achieved (TR Daily, Aug. 9).

It also proposed to “conduct an evaluation of fixed and mobile services using the same four categories for evaluation that were presented in the 2018 Report: (1) fixed services only; (2) mobile LTE services only; (3) fixed and mobile LTE services; and (4) fixed or mobile LTE services.” It also proposed to “rely again on a 5-year time period (2013-2017)” for the analysis and asked whether it should report on any additional speed tiers beyond those on which it reported in the 2018 report (25 megabits per second downstream/3 Mbps upstream, which is the agency’s broadband speed benchmark; 10 Mbps/1 Mbps, and 50 Mbps/5 Mbps for fixed service; and 5 Mbps/1 Mbps and 10 Mbps/3 Mbps for mobile LTE).

The NOI also proposed retaining the 25 Mbps/3 Mbps benchmark for fixed broadband services.

In comments filed yesterday, the Wireless Internet Service Providers Association said the FCC should maintain the 25/3 speed benchmark for fixed broadband services, which was adopted in 2015. “Given the fact that the speed required for the applications that most broadband consumers use has not changed substantially since then, and actual subscriptions have not yet consistently surpassed the benchmark level, WISPA agrees with the Commission’s proposal to retain the current standard,” it said.

As for the fixed-mobile substitutability issue, WISPA said, “Substantial evidence indicates fixed and mobile broadband convergence. For instance: About 60% of global mobile data traffic was offloaded onto fixed networks via Wi-Fi or femtocells in 2016.”

“Singular focus on ‘full substitution’ fails to fully take stock of substitution-related data that plainly exists. Rather than fall back on a binary conclusion on full substitution, the Commission’s next report should broadly analyze mobile and fixed competition and the degree to which those technologies are substitutable given varying consumer interests. And even if the Commission determines — as it must — that advanced telecommunications capability is being reasonably and timely deployed to all Americans, the Commission proactively should continue to remove regulatory barriers to spur additional infrastructure investment,” WISPA said.

The Internet Innovation Alliance submitted a white paper based on consumer market research that concludes that “consumers believe that fixed and mobile broadband services are essentially the same thing. As a result, the FCC should revise its prior conclusion and find that fixed and mobile broadband services are now functional substitutes.”

“A clear majority of consumers now use mobile devices for ‘bandwidth and data-intensive applications’ like streaming multimedia content,” IIA said. It added, “Mobile devices now play an important role in completing homework assignments and applying for jobs.”

Regarding the substitutability issue, the R Street Institute said that “by looking separately at fixed and mobile broadband, the Commission’s approach lacks technological neutrality, thus perpetuating the outdated, siloed version of the communications industry that has bedeviled the Commission’s work in recent decades. The Commission should right this wrong by evaluating broadband deployment with true technological neutrality. This means looking only at the objective metrics of consumers’ broadband service — such as throughput, latency, price and data caps — rather than at the technologies used to deliver such service.”

It added that “by defining (and redefining) ‘advanced telecommunications capability’ as a single benchmark, the Commission not only politicizes the Section 706 process, but also renders the historical data less useful. Instead of selecting an arbitrary benchmark that changes every year or two, the Commission should gather deployment data at multiple different benchmarks, analyze the data holistically and keep those benchmarks consistent. This will provide a more comprehensive and accurate report on broadband deployment, both at present and over time.

“Finally, by focusing primarily on the present state of broadband deployment and on future steps the Commission could take to promote it, the Commission neglects to critically examine and evaluate how effective its past efforts were at promoting broadband deployment. The Commission has now sought comment on the efficacy of its past efforts, and it should follow through by including a rigorous evaluation of those efforts in the forthcoming broadband deployment report, as was suggested last year by the Government Accountability Office,” the R Street Institute said.

Free State Foundation President Randolph May and senior fellow Seth Cooper said that the FCC should again find that advanced telecommunications capability is being deployed in a reasonable and timely fashion and should continue using 25/3 as the broadband speed benchmark. “The Commission should not change benchmarks based on aspirations that do not reflect widespread consumer demand and that are not grounded in the text of Section 706,” they said. They added, “Speed benchmarks should reflect capabilities for widely demanded applications. Netflix, Hulu, and Amazon Prime require not more than 10 Mbps for HD streaming or 5 Mbps for standard definition streaming. Sudden arbitrary changes would distract from Section 706’s concern with facts about deployment.”

The FSF commenters also said that mobile and wireline broadband are “substitutable” services. “The Commission’s upcoming report should analyze the degree to which those platforms are substitutes for purposes of making the required determination,” they said.

Other parties called for preserving the distinction between mobile and fixed broadband service for the purposes of the section 706 assessment.

Incompas said that the FCC “must continue to recognize the distinct differences between fixed and mobile broadband networks. Simply stated, mobile is not a full substitute for fixed service. American consumers and businesses rely on both fixed and mobile broadband networks. The privacy and protection of data and sensitive payment information is critical to businesses and consumers alike. The rise in cybersecurity threats is real, and businesses are more dependent on cloud services. They continue to expect to have access to both types of networks, and full substitutability has not been achieved.”

Incompas also urged the FCC to increase the fixed broadband speed benchmark.

“[I]t is time to be bold. The FCC should adopt 1 Gig[abit per second] as the fixed broadband standard for the nation. 1 Gig is already here, and where it is deployed, it is transforming communities. 1 Gig markets not only have faster speeds, but also more affordable prices. The U.S. should be setting high goals, not settling for speeds that major BIAS [broadband Internet access service] providers have surpassed in their initial offerings to consumers. In turn, consumers are using much higher speeds today due to the growth in streaming and over-the-top services, as well as the number of users per subscription,” Incompas said.

“Third, INCOMPAS’ members support the Commission’s efforts to lower barriers to broadband deployment, and the changes adopted this year are beginning to make a difference. However, as the Commission’s NOI recognizes there is still an unfortunate gap, and too many Americans do not have access to fixed and/or mobile networks. As the Commission itself has noted, barricades to new competitive deployment, especially at the local level, have been blocking competition for several decades. We urge the Commission to reject the attempts by large incumbents to slow competitors’ broadband deployment, including through USTelecom’s Petition for Forbearance,” Incompas said, referring to the U.S. Telecom Association’s petition for the FCC to forbear from enforcing unbundling and resale mandates for incumbents (TR Daily, Aug. 7).

WTA focused on the fixed-mobile substitutability issue.

“Where rural and other areas have access to both fixed and mobile services, WTA and its members have long found, and continue to find, that such services are far more complementary than competitive with each other,” WTA said.

“Throughout many of the more remote and sparsely populated portions of Rural America, mobile wireless service is currently intermittent, spotty or nonexistent,” WTA added.

WTA also pointed out that while individuals may use mobile service while traveling and commuting, “they frequently transfer to a home or other local WiFi network (which is typically a wireline network with a wireless router attached) whenever possible in order to avoid wireless data caps and overage charges.”

“These differences, as well as the trade-offs that end-users are willing to make regarding service matters such as speed, capacity, file size, screen size and mobility, mean that fixed wireline (and fixed wireless) facilities and services continue to play separate but complementary roles visa-vis and mobile wireless facilities and services in today’s public network and are likely to continue to do so during the foreseeable future,” WTA said.

Similarly, NTCA said that the FCC “should affirm its conclusion in the 2018 Broadband Deployment Report that mobile services, while providing significant value of their own and essential for many uses, are not currently a substitute for fixed services. This is especially true in rural areas where mobile connections are impacted significantly by terrain and distance, in addition to the evolution of speed and other performance demands prevalent regardless of location.”

NTCA supported maintaining the existing 25/3 speed benchmark.

Among those taking the view that advanced telecommunications capability is not being deployed in a reasonable and timely fashion, the Massachusetts Department of Telecommunications and Cable said that the FCC “should continue to conclude that mobile services are not full substitutes for fixed services. Consumers and businesses rely on both fixed and mobile broadband services, often using both in distinct ways. The Commission’s analysis should reflect this practice and should not diverge from its conclusion that mobile services are not full substitutes for fixed services.”

It added that the FCC should “assess fixed broadband availability using a definition of ‘available’ similar to that used for the Form 477. While this definition lacks sufficient granularity, given the highly location-specific nature of fixed broadband investment and the uncertainty before a competitive broadband project is proven viable, the Commission should consider only broadband service that is actually available.”

The Massachusetts DTC also said that it “(1) supports the Commission’s proposal to evaluate fixed and mobile services using four categories: fixed services only, mobile LTE services only, fixed and mobile LTE services, and fixed or mobile LTE services; (2) urges the Commission to incorporate affordability in its Section 706 analyses; and (3) believes that the Commission can speed employment of next-generation facilities by more closely coordinating its efforts with those of state and local governments.”

The National Rural Electric Cooperative Association also supported continued assessment of mobile and fixed broadband availability separately for section 706 purposes, citing differences in monthly usage limits and pricing.

NRECA said that it “wholeheartedly endorses the Commission’s current and planned universal service initiatives.” It called for requiring that the percent of a census block served must be reported on Form 477, “preferably using 10% decrements.”

As for the speed benchmarks, NRECA said, “In an increasingly digital world, the fixed broadband benchmark must keep pace with evolving technology. Relying on the average or median of all locations served at all broadband performance tiers will unduly limit benchmark adjustments in terms of frequency and performance tier. This is a concern for rural areas in which one or multiple broadband providers offering fixed broadband service at or above the current benchmark is far less common than in urban areas. In many urban areas, at least one if not multiple service providers are providing service well above the current benchmark. Symmetrical offerings are also prevalent in urban areas and may provide the basis for fixed broadband benchmarks.

“A far better approach is to adjust the benchmark based on a percentage of the census blocks or served locations at which the reported performance tiers exceed the current benchmark as compared to the total number of areas or locations that are unserved, below the benchmark and at the benchmark. Our proposed modifications to the FCC Form 477 would provide data that would enable rational benchmark assessments. In addition, fixed broadband benchmark adjustments should be assessed with some regularity; at least once every two or three years. The current benchmark has been in place since 2015; a comprehensive review is long overdue,” NRECA added.

The Communications Workers of America said that the FCC wrongly concluded in its last section 706 report that deployment was reasonable and timely.

“As the Commission’s report found, more than 24 million Americans still lack access to broadband services. Broadband use and adoption continues below optimal levels. According to the most recent census data, only two-thirds (67.3 percent) of people in the US have a wired broadband connection. For households earning $20,000 a year or less, 43 percent do not have a wired broadband connection, and for households earning between $20,000 and $75,000 almost 20 percent lack access. Access for people of color is particularly low. According to Pew Research Center, 43 percent of African-Americans, 53 percent of Hispanics, and 55 percent of low-income households (annual earnings under $30,000) do not subscribe to broadband at home, in many cases, because they cannot afford it. Based on these facts, it is clear that for a significant number of Americans broadband is not being deployed in a reasonable and timely fashion,” CWA said.

CWA also called for increasing the broadband speed benchmark to 100/10 Mbps, saying that “[o]n the peak speeds global ranking, the US does not break the top-10.”

CWA said that mobile services “are no substitute for fixed broadband” for both technical and business reasons, citing inconsistent mobile service; speed degradations with movement and signal obstruction; and data caps and throttling.

It said the FCC should make broadband deployment data reported by providers on FCC Form 477 “available in a timely fashion,” noting that “[i]t is September 2018 and the most recent Form 477 data available is from December 2016. Without timely data, the public cannot monitor the progress of broadband deployment timely data and has less recent data to support its comments in response to the Commission’s requests.”

In addition, CWA said, instead of asking providers to report “the maximum advertised speed available to at least one household in each census block,” it should require fixed broadband providers to report the maximum advertised speed available to every household (or at least 90 percent of the households) in the census block. Second, the advertised speed often differs significantly from the actual speed of the broadband service. CWA-represented technicians report instances in which they are dispatched to install a broadband order at a specified speed profile that was advertised to and purchased by a customer, only to discover that the network cannot deliver that speed. The Commission should conduct targeted audits of locations in which the carrier reports significant changes in Form 477 data from one reporting period to the next.”

The U.S. Telecom Association did not address the fixed-mobile substitutability issue. It said that “the pace of broadband investment is growing and deployment is strong”; that “rural America has benefitted from USTelecom member broadband deployment”; that the FCC “should continue to fund deployment in rural America and prevent overbuilding”; that the FCC should “consider how to remove further broadband investment barriers that result from pole attachment rates outside of the FCC’s section 224 authority”; and that the FCC should “grant USTelecom’s petition to forbear from section 251(c) unbundling and resale requirements.”

CTIA also did not address the fixed-mobile substitutability issue. It said, “By any rational measure, the Commission should find that the deployment of advanced telecommunications capabilities by mobile wireless providers is reasonable and timely.”

It added, “The Commission can take further steps to ensure that mobile broadband deployment remains reasonable and timely, including: continuing to modernize siting policies to advance wireless infrastructure deployment; allocating more low-, mid-, and high-band spectrum for exclusive licensed use; and moving forward as quickly as possible with MF-II support.”

The American Cable Association also did not address the fixed-mobile substitutability issue. It supported the continued use of a “progress-based” approach to the section 706 assessment, as well as continued use of the 25/3 speed benchmark and continued use of Form 477 data at the census block level.

ACA urged the FCC to “exclude storm-damaged regions from its overall deployment findings as it did in its previous report, while reporting separately on progress to restore broadband availability in such regions.” It recommended that the FCC “include three-to-five-year deployment projections in its next report. The projections could extrapolate from current deployment and household growth trends, while also incorporating the Commission’s knowledge of areas where USF grantees have committed or are expected to deploy broadband within certain timeframes. Quantifying these projections in its next report would allow the Commission to further substantiate the progress that is occurring, while also providing a clearer sense of the number or percentage of census blocks and households expected still to lack broadband in coming years.”

The NOI had also raised the issue of how satellite deployment data should be presented in the section 706 report, suggested that it be mentioned in text but omitted from a table presenting data on other technologies.

In its comments, Viasat, Inc., said, “No basis has been provided for separating satellite deployment data in this fashion, which implicitly would appear to treat satellite deployment as an afterthought. Viasat respectfully submits that satellite deployment data should be presented in tabular form, in the same manner as deployment data for terrestrial services (be they fixed or mobile). Such presentation would appropriately reflect the parity between terrestrial and satellite technologies, the Commission’s conclusion that satellite-based broadband service that meets its CAF II standards is the effective equivalent of terrestrial broadband services offered in urban areas, and the Commission’s guiding principle of technological neutrality.”

Viasat added, “The NOI further suggests that ‘satellite capacity’ could be a factor limiting the utility of satellite deployment data. This statement is an apparent reference to the fact that satellite networks currently provide nationwide coverage, but do not currently have the ability to simultaneously serve all of the approximately 10 million locations that the Commission has deemed to be ‘unserved.’ Viasat respectfully submits that this should in no way impact how satellite deployment data is evaluated or presented by the Commission.

“Any suggestion that satellite networks are capacity-constrained in ways that other networks are not is incorrect. All networks, regardless of technology (e.g., wireline, terrestrial wireless, cable, satellite) are capacity-constrained to some degree and lack the ability to simultaneously serve all potential users within their network service area at any particular level of service,” it said. —Lynn Stanton, [email protected]

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