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The Potential Fallout Of Changing FCC's Broadband Definition

Law360

Editor's note: Authored by J.G. Harrington and Henry Wendel, this article was originally published in Law360.

Federal Communications Commission Chairwoman Jessica Rosenworcel recently proposed that the FCC adopt new standards for what qualifies as broadband internet access service and for determining whether broadband deployment is sufficient to meet American needs.

The proposal would be the first update to the broadband standards in many years and could have a significant effect on FCC internet policies, including whether it will reinstate its network neutrality rules.

Under the Communications Act, the FCC is required to report annually on whether advanced telecommunications capability is being deployed on a reasonable and timely basis.

This evaluation is based on the FCC's determination of what qualifies as advanced telecommunications capability, which it has changed as technology evolves — and which historically has been based on the number of internet access providers in a given area and the broadband services they make available to consumers.

The FCC last adopted a new standard in 2015, when it set the minimum speed for advanced services at 25 megabits per second downstream and 3 Mbps upstream. At the same time, the FCC has used varying speed standards for other purposes, particularly in determining what services are eligible for federal universal service subsidies in rural areas.

Rosenworcel is proposing to raise the minimum speed for broadband to 100 Mbps downstream and 20 Mbps upstream. This would be consistent with the standard adopted in the most recent FCC universal service auction, which required participants to offer the same downstream and upstream speeds.

Rosenworcel also is proposing to set a national goal of 1 gigabit per second downstream and 500 Mbps upstream speeds "for the future," although that would not be a binding standard.

In addition, Rosenworcel has proposed that, for the first time, the FCC consider "affordability, adoption, availability and equitable access" in determining whether broadband is being deployed sufficiently.

This would broaden the scope of the FCC review beyond the percentage of the population that has access to service at benchmark speeds to a wider range of issues, including whether certain groups, such as low-income households or members of minority groups, can obtain access at the benchmark speed.

This more granular analysis would make it more difficult for the FCC to conclude that broadband is being deployed on a reasonable and timely basis.

In the most recent FCC competition report, the FCC found that more than a third of residential customers, and more than two thirds of customers in rural areas, did not have access to broadband service at 100 Mbps or faster speeds.

Adopting the proposal to increase the minimum speeds will reduce the percentage of the country that is deemed to have broadband service and the number of areas that are deemed to have competitors.

If the proposal to consider affordability, adoption and other factors is adopted, the percentage of the country that would be deemed to have access to broadband service would be reduced further, and also likely would not include some urban areas that today are treated as having access.

Together, these changes will make it more difficult for the FCC to conclude that broadband is being deployed on a reasonable and timely basis. The impact of adopting Rosenworcel's proposals could affect many areas of FCC policy.

For instance, the FCC has used determinations about the availability of broadband service in considering whether to adopt network neutrality rules. If this new standard is adopted, and particularly if it includes affordability, adoption or other criteria in addition to the speed that is offered, the FCC will have a stronger argument for the necessity of additional regulation of broadband, whether through network neutrality or other means.

For that reason, any change in the standard for what broadband service is could lead to a determination that broadband is not being deployed in a reasonable and timely manner could result in regulatory changes.

In addition, adopting a new standard could affect future federal programs that subsidize the buildout of broadband networks, including the universal service programs.

For example, while the FCC used the 100 Mbps/20 Mbps standard as a minimum requirement for its last round of universal service funding for rural areas, eligibility for funding was based on whether 25 Mbps/3 Mbps service — the current standard for broadband — was available.

If the broadband standard is changed, many more rural areas would be deemed to be unserved, greatly expanding eligibility for any future universal service funding.

Similar impacts could occur in the FCC's Lifeline program, which currently provides subsidies for low-income households for 25 Mbps/3 Mbps or faster broadband service. While the current rules set the minimum speed based on what services are available at the national level, changes in the standard for what constitutes broadband service could create pressure to modify the Lifeline minimum speed.

Adoption of the 100 Mbps/20 Mbps standard for broadband also could result in an increase in the minimum speed for Lifeline if providers respond to the new standard by increasing the speed of their offerings.

Last year's Infrastructure Investment and Jobs Act provided $42.5 billion in funding to construct new internet networks with speeds at least at the 100 Mbps/20 Mbps standard.

In addition, the FCC recently denied an application from SpaceX that would have provided almost $900 million in federal funding to build out its Starlink satellite internet service.

SpaceX had proposed to provide 100 Mbps/20 Mbps service in hundreds of thousands of locations across the country, but the FCC concluded that Starlink did not comply with the FCC's service requirements.

Taken together, these actions suggest a coordinated effort across this administration and congressional leadership to make the 100 Mbps/20 Mbps threshold a standard for funding, in addition to being used in the FCC's reporting requirements.

Other federal programs administered by the FCC or other agencies, in an effort to be future-proofed, could set more stringent requirements for supported service, perhaps requiring even higher network speeds. This could limit the types of internet service that are provided with financial support, as some technologies are not well suited to provide service at these higher speeds.

The draft proposal to revise the definition of broadband currently is under review by the FCC commissioners and could be released officially at any time as part of the broader inquiry on the availability of internet access.

As the FCC currently has two Democratic commissioners and two Republican commissioners, it is possible that the Republican commissioners could block including the proposal in the final request for comments.

At the same time, Republican commissioners could support this proposal because it reflects standards used in other proceedings, particularly the 2020 rural universal service order that FCC Commissioner Brendan Carr supported.

Even if the proposal is not included in the inquiry, Rosenworcel's announcement almost certainly will trigger comments on these issues, and after the fifth FCC commissioner is confirmed, these proposals could be adopted in the final broadband deployment report.

Related Contacts
J.G. Harrington   Special Counsel Washington, DC
Henry Wendel  Special Counsel Washington, DC