AFFORDABLE Broadband for ALL by 2020

Can it be done?  Hillary Clinton, if elected, promises that 100% of households will have access to affordable broadband service by 2020.  She has indicated that $275 billion dollars in continued funding of government programs such as Connect America, Rural Utilities Services, and Broadband Technology Opportunities will support that goal.  The private sector is also part of the solution as Google Fiber will enter more communities and cable operators, like Comcast, will upgrade their data over cable networks. 

But, there remains a digital divide.  In urban communities, only 4% of the population is without access to high speed broadband.  Why?  The economics of installing/upgrading broadband networks works for private firms in high population density areas.  The same is not true in rural communities where, on average, 39% of the population is currently without access to high-speed broadband.  Why?  In rural communities, the population density averages 17.5 persons per square mile, compared to 2,438 in urban markets.  There is no incentive.  Will the government’s “commitment” be enough?

	% of Urban Pop. w/o access	% of Rural Pop. w/o access	Access % Difference: Rural - Urban	Population Density - Rural	Population Density - Urban	Pop Density Difference: Urban - Rural
United States	4%	39%	35%	17.5	2,437.7	2,420.3
Alabama	6%	41%	35%	40.6	1,333.1	1,292.5
Alaska	5%	67%	62%	0.4	1,915.6	1,915.1
Arizona	8%	63%	55%	5.9	2,841.7	2,835.9
Arkansas	7%	48%	41%	25.0	1,588.8	1,563.9
California	2%	61%	59%	12.2	4,484.2	4,472.0
Colorado	4%	53%	49%	6.7	3,043.5	3,036.8
Connecticut	1%	1%	0%	142.0	1,753.6	1,611.5
Delaware	2%	10%	8%	102.5	1,926.1	1,823.6
Florida	4%	29%	25%	37.9	2,450.3	2,412.3
Georgia	4%	25%	21%	46.8	1,627.1	1,580.3
Hawaii	0%	22%	22%	18.4	3,331.3	3,312.9
Idaho	4%	55%	51%	5.6	2,434.6	2,429.0
Illinois	4%	56%	52%	26.4	2,947.6	2,921.3
Indiana	5%	52%	47%	52.8	1,933.6	1,880.8
Iowa	4%	37%	33%	18.3	2,200.3	2,182.1
Kansas	5%	49%	44%	8.0	2,344.5	2,336.5
Kentucky	3%	34%	31%	47.6	1,877.1	1,829.4
Louisiana	8%	50%	42%	29.3	1,720.1	1,690.8
Maine	4%	17%	13%	27.1	1,442.7	1,415.7
Maryland	3%	13%	10%	96.5	2,607.0	2,510.5
Massachusetts	2%	10%	8%	108.7	2,047.7	1,939.0
Michigan	3%	37%	34%	46.5	2,037.1	1,990.5
Minnesota	1%	43%	42%	17.4	2,405.7	2,388.3
Mississippi	9%	60%	51%	32.9	1,363.2	1,330.3
Missouri	5%	61%	56%	26.1	2,141.0	2,115.0
Montana	9%	61%	52%	3.0	2,004.4	2,001.5
Nebraska	6%	51%	45%	5.4	2,802.8	2,797.5
Nevada	5%	65%	60%	1.4	3,633.1	3,631.7
New Hampshire	3%	15%	12%	63.6	1,260.6	1,197.0
New Jersey	2%	21%	19%	104.4	2,901.0	2,796.6
New Mexico	9%	61%	52%	3.7	2,072.2	2,068.5
New York	0%	17%	17%	52.0	4,235.4	4,183.4
North Carolina	1%	20%	19%	74.9	1,479.9	1,405.0
North Dakota	2%	37%	35%	3.3	2,522.7	2,519.4
Ohio	2%	31%	29%	68.3	2,060.7	1,992.3
Oklahoma	9%	66%	57%	18.3	2,027.9	2,009.5
Oregon	5%	37%	32%	7.5	2,969.7	2,962.2
Pennsylvania	3%	20%	17%	67.5	2,162.3	2,094.8
Rhode Island	2%	2%	0%	154.0	2,377.9	2,223.9
South Carolina	8%	38%	30%	56.7	1,385.1	1,328.3
South Dakota	2%	26%	24%	4.3	2,299.5	2,295.2
Tennessee	2%	34%	32%	56.6	1,529.0	1,472.4
Texas	5%	46%	41%	15.2	2,643.6	2,628.4
Utah	3%	39%	36%	3.2	2,973.1	2,969.8
Vermont	2%	27%	25%	41.9	1,609.9	1,568.0
Virginia	3%	38%	35%	53.5	2,403.7	2,350.2
Washington	1%	14%	13%	17.0	2,520.7	2,503.7
West Virginia	10%	48%	38%	40.9	1,429.7	1,388.8
Wisconsin	1%	43%	42%	31.9	2,204.3	2,172.4
Wyoming	3%	63%	60%	2.1	2,001.6	1,999.5
Source: FCC 2016 Broadband Report

Rule Change?

What is the “right” amount of regulation (rules) in contract negotiations between just two parties with clearly defined property rights?  The quick answer is NONE.  But, in the case of retransmission agreements between cable operators and programmers, subscribers are often harmed (e.g. programming blackouts) as a result of the inability of the parties to reach a mutually acceptable agreement in a reasonable amount of time. 

Under current Congressional authority, the FCC can step in when there is an impasse in negotiations and consider the “totality of circumstances” to support the process.  But, should they do more?  I don’t think so. For a regulatory body to try to codify rules to address all (most) of the possible scenarios in these types of agreements/disputes would be difficult (impossible) and too costly to do. 

https://www.fcc.gov/news-events/blog/2016/07/14/update-our-review-good-faith-retransmission-consent-negotiation-rules

The Cable Box Drama

While I was away in Italy teaching and vacationing (a bit), it seems like not much changed in the cable box drama except, perhaps, the name.  The FCC’s proposed plan to “unlock the [cable] box” to allow entry by competitive converter devices and apps to supply programming into people’s homes was met with unsurprising opposition from cable operators because of the huge potential loss in monthly revenue from cable box rental fees.  The counter proposal from the industry of “ditch the box” would limit competitive entry by opening up the current boxes to third party apps, but continue the industry’s monopoly hold on the device.   Let’s see how long this takes to resolve and how the presidential election may impact the outcome.

Bringing the fight to people

They are at it again.  An MVPD vs. Programmer.  This time it is DISH and Comcast that can’t seem to agree on acceptable carriage terms.

ROUND I goes to Comcast.  Last week, Comcast notified DISH (and non-DISH) subscribers via ads and tweets that they were at risk of losing NBC-U programming because of a contract dispute between the two firms.

ROUND III goes to DISH as it sues Comcast over the ads and agrees to enter arbitration.  On Friday, DISH notified the FCC that it will seek arbitration to resolve the dispute.  During the initial 10-day cooling period and subsequent binding arbitration, NBC-U is not allowed to blackout its networks.

Who wins in the end?  Maybe neither as fed-up subscribers “view” it as another reason/excuse/final straw to switch exclusively to over-the-top streaming services.

It’s [almost] a done deal

Charter is about get FCC approval on its plan to buy TWC and Bright House Networks for $60B+.  Likely conditions attached to the deal are assurances to comply with net neutrality rules, even if thrown out by the D.C. Circuit Court of Appeals, expand high-speed broadband into communities with no alternative to the low-speed offerings of the incumbent telecom company, and limit/restrict Charter from including how content owners can distribute their programming.

With little network overlap among cable firms, the DOJ’s antitrust concerns will not be on the elimination of local TV market competition, but on the combined firm’s heft in programming negotiations (same concern with the Comcast-TWC deal, but on a smaller scale).

If the merger is approved, Charter will be the second largest MVPD/ISP in the country.