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The FCC Finally Takes Off Their Rose-Colored Broadband Glasses
After a decade of bad policy based on even worse data...
by Karl Bode 12:39PM Friday Jul 24 2009
As we've complained about for years, the FCC has traditionally made broadband policy decisions based on flawed and incomplete data. Part of the 1996 Telecom Act required that the agency release quarterly reports on the status of broadband deployment. Unfortunately for consumers, that data has always been essentially useless -- with the FCC declaring any zip code that has just one served broadband customer in it to be "wired" for service. This flawed methodology has dictated FCC policy for years.

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The FCC has used this "evidence" of healthy broadband infrastructure to support deregulatory policies lobbied for by the nation's largest carriers, who obviously don't want government intervention mucking with revenues. With new boss Julius Genachowski at the helm, the FCC has been promising that they're going to start actually making decisions based on data.

The FCC had already decided to use more accurate census-level zip code data for broadband penetration measurement. But with Genachowski in charge, the agency is also going to employ Harvard's independent and objective Berkman Center to start confirming the accuracy of broadband penetration data.

But before any of that happens, the FCC had one more report to issue that made use of the agency's completely useless zip code reporting methodology. That latest report (pdf), which includes data current as of June 2008, continues the scientifically challenged mindset that's plagued the FCC for a decade, and maintains the painfully low bar for defining broadband connections (anything faster than 200kbps).

"The FCC and others have recognized these requirements as insufficiently granular or precise to inform necessary policymaking."
-The FCC, in what may be the understatement of the decade
Using the FCC's completely useless reporting methodology, you'll be happy to note that the United States achieved universal broadband penetration as of June, 2008. The last report of its kind proudly proclaims that not only do 100% of zip codes have access to at least one provider, but roughly 95% of zip codes have access to four or more ISPs. Mission accomplished, eh telecom lobbyists?

The FCC itself has admitted the uselessness of their previous data collection for some time. "The FCC and others have recognized these requirements as insufficiently granular or precise to inform necessary policymaking," the FCC stated in a press release. Of course that awareness came after a decade of sweeping policy changes that resulted in American consumers paying more money for less bandwidth than more than a dozen developed countries.

While government dysfunction can be blamed for some of the FCC's oversight, incumbent lobbyist control of government is the primary culprit responsible for our science-related dysfunction. Shiny, happy data means no need for government intervention, considered the apex of evil for telecom lobbyists and "free marketeers" everywhere. And while a decade of these anti-regulatory policies have resulted in higher revenues and explosive growth for carriers, consumers enjoy less competition, fewer consumer protections, and extremely limited choice.

In the more nuanced light of the real world, regulation is neither wholly evil or wholly good. There is a balance to be struck between sound regulation and "free market" capitalism. Each attempt at government regulation requires debate on its specific merits. That's particularly true as the government finally catches up to its international counterparts and begins crafting a national broadband plan. But without sound data, that debate cannot occur to any degree of usefulness -- and hasn't for more than a decade in the telecom sector.

While the FCC's decision to scrap form 477 data reporting certainly is only just the first step in reforming the very broken FCC, it's certainly a welcome one. Hopefully this week saw the last FCC broadband progress report based on little more than fluff and nonsense. Here's to hoping that future policy decisions, good or bad, at least lay on a solid bedrock of science and data -- instead of shiny baubles, lobbyist influence and junk science.


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jaminus

join:2004-10-14
Arlington, VA

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reply to wentlanc

Re: Well Said Karl

Greed is what has made America the wealthiest country on earth. Greed is why we don't die in our fifties but instead in our seventies or even eighties. Greed is why the iPhone, the Core 2 Duo, and Google were invented right here in America.

If you think greed is evil, and that we should all live for others, rather than ourselves, then I suggest you read about the experience of the Soviet Union to learn what the logical result of that reasoning is.


jaminus

join:2004-10-14
Arlington, VA

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reply to Matt3

The problem with trying to become the "world technology leader" in broadband via government spending is that doing so necessarily redirect resources from other more productive uses of those resources.

Take Japan. They've got much, much better broadband than we do here. There's no denying it.

Yet are they more prosperous than us Americans? No they are not. Look at any meaningful metric of wealth creation and you'll see the U.S. is markedly ahead of Japan. For example, Americans enjoy on average over 50 % higher personal disposable income than the Japanese.

Now, I love my fat (broadband) pipe and I don't know how I'd live without it. But the American people at large do not share the same obsession with fast broadband that we DSLR contributors do. The sooner policymakers understand the disconnect between the broadband fetishism of the techno-evangelists at Free Press and the actual desires of the average American consumer, the better.

Times are tough, and lots of people are struggling. Broadband is great, but it's not the only thing that we need to spend our money on here in the United States. Health care, education, entertainment, recreation, and just plain old luxuries of life are all important, too. No regulatory agency knows the best mix of spending. Only through decentralized decisionmaking--spontaneous market order--can we allocate resources in a way that matches what people actually want.

This is why very few actual trained economists who aren't on industry payrolls want the FCC to get actively involved in the broadband market. It's bad public policy designed to score political points, but it's ultimately the opposite of what's best for the American economy.



FFH
Premium
join:2002-03-03
Tavistock NJ
kudos:5

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reply to Matt3

said by Matt3:

said by Karl :

In the more nuanced light of the real world, regulation is neither wholly evil or wholly good. There is a balance to be struck between sound regulation and "free market" capitalism.
I 100% agree. We need to strike a balance to ensure reasonable profits for private enterprise, but a balance that also ensures we are the worldwide technology leader.
Why do we have to be the worldwide technology leader? There are advantages to being just behind the leaders. The development and research costs are borne by others and the initial problems of rolling out new technology are identified and already corrected by others. It then becomes more economically efficient to trail a little behind. You don't want to be at the tail end, but being 1st isn't always beneficial.

If most of the world actually honored intellectual property laws and international agreements, there are some financial benefits by being the prime developer and by being 1st. But that is rarely the case. It is better to be like China and steal the developments and then refuse to pay patent fees. So the US has been suckers for the world in this area. I say turn the tables and let them develop it. Then we can steal their technology at extra low cost.
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