Second layer: Focus on the positive

Correlation of DL speeds on a state average basis	Download DL>100	Download DL>50	Download DL>25
Download DL>100	1.00
Download DL>50	0.66	1.00
Download DL>25	0.62	0.91	1.00

The FCC's move to modify the definition of high speed broadband to DL > 25 mbps doesn't really change much except for the count of competitive providers per community that offer the new minimum "level" of service.  According to the NCTA, 85% of U.S. households currently have access to network download speeds of 100 mbps or more.  It has been and will continue to be a question of how to improve service to the 15% of the population who reside in rural communities that comprise 72% of the nation's land mass (Census Bureau).

Beginning to peel the onion on...

how do we increase high speed broadband access.

First layer:  Broadband Stimulus Program through the ARRA
The graph below shows the relationship between % of a state's population with DL > 25 mbps and the awards (grants and loans) per capita of the NTIA's Broadband Technology Opportunity Program (BTOP) and the Rural Utilities Services's Broadband Initiatives Program funded through the ARRA.

Source: Congressional Research Service and NTIA.  Excludes multi-state awards

The top five award recipients on a per capita basis.

State	Awards per capita	DL > 25 mbps	% urban
Vermont	$        276	20	39
Alaska	$        188	62	66
North Dakota	$        139	86	60
Montana	$        131	13	56
West Virginia	$         99	59	49
Median all states	$         27	84	74

To expand high speed broadband availability into non-urban areas, more government resources ($$ or as providers) are needed as it won't happen from competitive entry into these markets anytime soon.

What does it all mean for Pennsylvania?

Unless you live in one of the 40 Pennsylvania counties where less than 90% of residents have access to broadband download speeds of 25mbps, you might not care much about the FCC’s new definition of what constitutes high speed internet and Verizon’s sale of its wireline assets in three states (CA, FL, TX).  But what happens if competition (e.g. Verizon) in PA goes away?

County Type	#	Population	# of counties (pop) with access to DL speed > 25mbps	# of counties (pop) with access to 50%+ FIOS coverage*
Urban	19	9.36M	18 (9.14M)	10 (6.29M)
Rural	48	3.48M	9 (0.67M)	0

*FIOS is available in parts of 13 urban PA counties

Sources: fiberforall.org and broadbandmap.gov

Verizon's Exit

The writing has been on the wall.  In 2010, Verizon sold its wireline assets in 14 states to Frontier Communications.  Last week, it announced an agreement with Frontier to sell its wireline assets in 3 additional states (California, Florida, and Texas).  While it will maintain its presence in 9 northeastern states and the District of Columbia, is this only temporary?  Over the past few years, Verizon has scaled back its fiber build and focused most of its resources on mobile.  With the Frontier sale, Verizon will shed 31% and 21% of its FIOS internet and video customers, respectively.  In wireline telecom and broadband, has the regulatory oversight and its related costs become too much for Verizon? 

As it moves closer to “the exit”, what does it mean to the customers it leaves behind?  What does it mean for wireline broadband competition?  The simple answer to both questions…it’s not good.

Three Cheers for Net Neutrality?

Not so fast!  I get that the initial winners will be the [small and new] content providers who won’t be at risk of being disadvantaged by ISPs in the allocation of broadband facilities.  I get that the initial losers will be the ISPs who might have wanted to extract higher rents from larger content providers for faster, uninterrupted transmission and now won’t be able to.  I get that, as consumers, we think we will be better off because our cable/broadband bill shouldn't go up in the absence of these fees. 

But, are we in la-la-land?  With more content going over fixed capacity in markets with very limited or no competition, someone has to pay up and that collective someone is us.  The inevitably higher price of broadband will force some of us to cut the cable cord to pay for it.  Maybe that is the only way we become better off!

Broadband = Telecom

The writing on the wall and the not-so subtle hints tell us that, this week, FCC Chairman Wheeler will propose regulating  the internet as a telecommunication service under Title II.

The battle will then shift to what will be the broadband "rules" and is there a slippery slope to rate regulation.  The cable firms can live with public utility regulation if there is not an attempt to over-regulate.  My concern is that there usually is.  Then what!