FCC Uses Cherry-Picked Stats To Justify Giving Consumers A Giant Middle Finger

from the ill-communication dept

One of the fundamental cornerstones of disinformation and propaganda is repetition. As in, if you state something often enough, the idea gets lodged in the recipient's head and becomes truth by an act of sheer will. It's called the “illusory truth effect,” and it's been essential across most of the Trump administration as it attempts to convince the public that up is down, and black is white. It has been absolutely essential at the Trump FCC, where the agency has worked tirelessly to convince the nation that kissing the ass of the biggest telecom operators is intelligent policy.

You'll of course recall that one of the FCC's key justifications for killing consumer protections like net neutrality is that the modest rules stifled industry investment. Objective data from a litany of different sources has confirmed that's simply not true, including SEC filings, earnings reports, and the statements of countless industry CEOs. That hasn't stopped Ajit Pai, major telecom providers, or the litany of their dollar-per-hollar consultants and think tankers from making the claim anyway.

As required by Congress, the FCC periodically releases a Broadband Deployment Report indicating whether affordable, fast broadband is being deployed in a "reasonable and timely" fashion. This week, the FCC circulated a draft order of the initial report among Commissioners. It wasn't made public, but a statement by the agency (pdf) offered up a few choice statistics to imply that its attacks on consumer protections is having a miraculous impact on the telecom market. The FCC's chosen metrics are very...specific:

  • The number of Americans with access to 100 Mbps/10Mpbs fixed broadband increased by nearly 20%, from 244.3 million to 290.9 million.
  • The number of Americans with access to 250 Mbps/50 Mbps fixed broadband grew by over 45%, to 205.2 million, and the number of rural Americans with access to such service more than doubled.
  • What the Pai FCC doesn't tell you is these numbers have absolutely nothing to do with its policies. One, this data is only current up to late 2017, when net neutrality wasn't even repealed until June of 2018. In other words, this growth occurred while net neutrality regulations were technically still active. That didn't stop a lot of outlets from unquestioningly parroting the FCC's claims that this growth was somehow thanks to killing net neutrality or other "burdensome red tape."

    A huge chunk of this growth in 100 Mbps connections is simply thanks to the cable industry's deployment of faster DOCSIS 3.1 coaxial technology. Those deployments began before Pai came to office, and were fairly quickly rolled out because they cost the industry relatively little to deploy. Again, these upgrades have absolutely nothing to do with his actual policies. This growth would have occurred had Pai done absolutely nothing.

    What's more important is what the Pai FCC doesn't talk about. While cable giants like Comcast and Spectrum have been deploying these upgrades, the nation's phone companies have effectively stopped upgrading their DSL lines. That's providing cable giants with a monpoly over broadband across countless markets, resulting in higher rates and less incentive than ever to improve the industry's Achilles' heel: utterly atrocious customer service.

    None of this prevented Ajit Pai from enjoying a victory lap:

    “For the past two years, closing the digital divide has been the FCC’s top priority,” Chairman Pai said. “We’ve been tackling this problem by removing barriers to infrastructure investment, promoting competition, and providing efficient, effective support for rural broadband expansion through our Connect America Fund. This report shows that our approach is working. But we won’t rest until all Americans can have access to broadband and the 21st century opportunities it provides to communities everywhere.

    Pai likes to present himself as a hero to rural America and consumers. And he likes to repeat the idea that mindless "deregulation" (which in telecom parlance means killing consumer protections) provides untold benefits to the public. But you'd be hard pressed to find a single consumer group (you know, the people paid a pittance to try and protect consumer rights) that supports his policies. And when you go into many rural markets (and tribal lands), you'll be quickly told that many of his industry-favored policies are actually hurting these communities, driving up costs, and making the problem worse.

    Another metric the FCC throws around as evidence that its "deregulatory" strategy is working is the claim that 2018 saw record growth in fiber deployments:

    The private sector has responded to FCC reforms by deploying fiber to 5.9 million new homes in 2018, the largest number ever recorded. And overall, capital expenditures by broadband providers increased in 2017, reversing declines that occurred in both 2015 and 2016.

    Except the FCC just issued a separate report stating that fiber deployment "appears to have slowed recently," largely thanks to US telcos that are refusing to upgrade or even repair aging DSL lines. More importantly, at least 3 million of those locations only occurred because the previous FCC required AT&T to expand its fiber deployment to an additional 3 million homes each year, which is the opposite of deregulation, and once again, had absolutely nothing to do with Pai's industry-cozy policies. Other reporters have noted this period's growth was about even with, and in some instances slower than past reports.

    It apparently doesn't matter how many times you repeat the fact that net neutrality didn't stifle CAPEX or deployment. It doesn't matter how many times you point out that CEOs themselves have admitted this claim isn't true to investors (who, by law, they can't lie to). It simply gets repeated over and over again. Legit condemnation is routinely ignored, no matter how factually sound. This repetition is an attempt to use the illusory truth effect to forge a new reality: one where sucking up to entrenched monopolies and ignoring both consumers and a broken market somehow results in near-magical outcomes.

    You'll notice that Pai's FCC goes comically out of its way to avoid talking about the one thing that probably matters most to American consumers: broadband pricing.

    It's a subject they avoid because it's an argument they know they can't win, even with repetition. Americans continue to pay some of the highest prices for broadband in the developed world thanks to limited competition and market failure. And thanks to the cable industry's growing monopoly, that problem's only getting worse. But instead of actually pushing an agenda that truly drives more competition to market, the Pai FCC is burying its head in the sand, parroting whatever Verizon and Comcast tell them to say, and trying to sell it to you, the American public, as adult policy.

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    Filed Under: ajit pai, broadband deployment, cherry picking, fcc, net neutrality, stats

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    1. icon
      James Burkhardt (profile), 27 Feb 2019 @ 8:46am

      Re: is a form of government failure

      "Pai's FCC" refrences the current FCC. It allows us to identify the collection of Policies and viewpoints we are discussing. As Pai is the head of the FCC, it makes sense, much as we talk about the Trump White House/Trump Administration.

      We can then compare and contrast the Wheeler FCC or the Obama White House/Obama Administration. There are people shared. There are people different. It involved for more than the one person we name.

      We in fact do this in the private sector as well. We compare the Steve Jobs Apple with the Tim Cook Apple. The Gates Microsoft with the Ballmer Microsoft with the Nadella Microsoft. Lots of employees are often shared over these different CEOs, given the way Tech refused to poach, but we can compare each era as defined by the decisions of the CEO.

      Because of this, the use of "Pai's FCC', particularly when discussing the statements of the FCC that directly support Pai's positions, is appropriate.

      As for this statement:

      Severe problems of regulatory-capture and constant counter-productive government market interventions are discussed but largely ignored as practical solutions.

      I'll give you editing mistakes, and assume that you mean that fixing the problems are largely ignored as solutions. And I drop the practical weasel word Because whenever fixing the issues you discuss are brought up, the practicality of solving them seems to be the core question.

      This very article is questioning deregulation, which Pai presents as solving "counter-productive government market interventions", if in different words. The article, combined with other articles on the topic, widely discuss the viewpoint that just because a regulation exists, doesn't mean it is counter productive.

      I have not seen a practical solution to the issue of regulatory capture in the broadband space that also addresses the concerns of consumer protection, expanding broadband to low ROI areas, and oversight of the use of government subsidies. Competition is the real solution, it would seem. That is not in debate. But the practicality of using deregulation or shuttering the FCC entirely to encourage the entry of competition is certainly in question. Removal of the regulatory agency just perpetuates the complaints with the current actions of the regulatory agency, while not significantly lowering the barriers to market entry, namely time, cost, and property rights in utility pole ownership and cable ownership. Deregulation doesn't solve any of these issues (except perhaps property rights, but I don't think you want to dismantle those). Google Fiber was not burdened by cost or regulation. Google Fiber was burdened by time, time which kept being a greater and greater cost because of bad faith actions employing property rights to tie up deployment. Removing the FCC doesn't fix that equation.

      You question why they aren't seen as practical solutions? Because solutions involving deregulation to improve the market not tied to real-world market analysis and the way the market operates in practice run on a faith based assumption that the regulations are the only barrier to entry.

      Techdirt supports removing restrictions on community funded broadband, restrictions which are largely industry bought regulatory capture. That is a practical solution allowing smaller, low ROI communities to develop public or private/public partnership networks that could potentially better serve their community. But that requires allowing municipal governments to intervene in the market, which gets a bit awkward.

      You use mitigating phrases like 'practical' and 'counter productive' and 'constant' in your comments, but Techdirt discusses the practicality of solutions, and calls for large market interventions only after years of failures for the market to correct. You provide no examples to properly discuss what you consider practical or counter productive. You will likely claim I misrepresented your opinions. But with you having not presented any specifics, I have to assume some to debate with any clarity.

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