from the essential-utility dept
Let’s stop ignoring the obvious: broadband internet access service is a public utility and needs to be regulated as one.
American consumers agree. A Consumer Reports survey from earlier this year found that four out of five (80 percent) consumers believe broadband service is as important as water and electricity. Indeed, broadband has become the essential service in the daily lives of 21st century consumers. The COVID-19 crisis has thrown this fact into sharp relief as many of us depend on an internet connection to work from home, attend virtual classrooms, receive medical care via telehealth services, stay connected with friends and family, and for entertainment.
The pandemic has proven just how critical a reliable, fast and affordable internet connection is today. However, unlike water, electricity, or even phone service, broadband internet service is neither universally available, nor is it regulated to guarantee access, ensure fair prices, or promote competition in the marketplace.
As a result, there exists a deeply troubling “digital divide” between those Americans who have and can afford internet service, and those who cannot. The divide is two-pronged, as both access and affordability determine whether consumers are able to get online. Access is meant as a home wired for broadband internet, and affordability is determined by whether a consumer can pay the price for service demanded by the internet service provider (ISP).
Unfortunately, those in charge at the Federal Communications Commission have proven incapable of bridging this divide. In fact, the decision a few years ago to reclassify broadband as an “information service” instead of what it obviously is, a “telecommunications service” has practically removed the Commission from any meaningful oversight role over ISPs. The next Congress needs to rectify this wrong and enact a new framework to govern broadband service, ensuring that it is both accessible and affordable to consumers.
To be sure, the FCC could restore its regulatory authority over broadband by reclassifying it as a telecommunication service. The 2005 Supreme Court decision in Brand X established that the Commission has the flexibility to make such classification decisions—decisions with real consequences for consumers that extend beyond esoteric legal exercises.
The very question of whether broadband is an information service versus a telecommunications service has been at the heart of the current net neutrality struggle for almost two decades. At the risk of gross oversimplification, an information service classification roughly translates into fewer regulations. Conversely, a telecommunications service designation avails the FCC of a stronger set of tools rooted in common carrier authority, with powers to better foster competition, ensure non-discriminatory access, and put a cap on rates that are too expensive for consumers.
The FCC correctly classified broadband as a telecommunications service in 2015 as part of its Open Internet Order, enabling the issuance of common sense net neutrality rules. This action was approved by a federal court in the 2016 USTelecom ruling. Unfortunately, all that was discarded when the current Commission reversed course a year later and decided to reclassify broadband once again, this time as an information service, as a fundamental part of its repeal of the 2015 net neutrality rules. Though obvious to us that broadband is a telecommunications service, the classification debate—read the lengthy justification for declassifying broadband in the Restoring Internet Freedom Order—has descended into a medieval exercise to determine how many angels can dance on the head of a pin.
The back-and-forth war over net neutrality fought time and time again at the FCC must end. Make no mistake, ensuring an open internet is an important policy struggle, but the FCC’s failures reveal a deeper problem: how can we best regulate internet service supplied by ISPs, which is NOT to be conflated with regulating the internet, as is so often the lament from the anti-net neutrality crowd.
The current status quo cannot be allowed to stand and it will not increase more broadband access at an affordable price. Absent much more than flimsy transparency requirements, ISPs are free from any real rules imposed by the FCC or Congress. Moreover, ISPs like Comcast and Charter are mostly insulated from competition—a study published this past summer revealed that these two companies alone maintain a monopoly over 47 million American consumers, and even more (an extra 33 million) if we disregard DSL as a real competitive choice in 2020. Adding to the misery, the rates charged by ISPs are totally inscrutable. Prices vary from neighborhood to neighborhood within the same city, and yet there’s no clear sense how prices are determined or if they’re consistent.
Though FCC Chairman Ajit Pai and others ridiculed the 2015 Open Internet Order as “utility-style” regulation, consumers now recognize broadband service as exactly that: a utility. It should be governed as such to benefit consumers. Not ISPs.
A new Congress will be sworn in next January. It can settle this debate once and for all. We can no longer endure the seesawing classification debate at the FCC, the winner of which depends upon a Presidential election every four years. Therefore, legislation must be passed to grant the FCC new, clear authority to govern broadband service as a telecommunications service, an essential utility.
Emboldened with the power to regulate broadband like a utility, the Commission can ensure affordability by applying price caps, especially where there is not effective competition and prices are too high. Alternatively, the FCC could spur competition by requiring ISPs to unbundle their networks to allow new entrants to offer service. Utility-style regulation could also be used to require deployment to underserved areas and to standardize service offerings to make sure consumers can afford a package to meet their everyday needs of remote work and online learning. Finally, as demonstrated by the 2015 Open Internet Order, utility regulation permits the FCC to require non-discriminatory access to ISP networks, the foundation for re-establishing strong net neutrality rules.
Additionally, Congress must fund a massive internet infrastructure project to get broadband into the home of every American family. Estimates that 42 million Americans lack access to fixed broadband service is unacceptable in 2020. Kids trying to attend class online shouldn’t have to drive to a parking lot to use free WiFi offered by libraries, sports arenas, or fast food restaurants. And though rural areas typically suffer a lack of broadband access, it is also an urban problem. The Gotham Gazette recently reported that: “According to city data, 40% of households in the city — home to roughly 3.4 million people — don’t have both home and mobile internet connections, and 18% have neither.”
Congress should further consider measures to make broadband affordable for all Americans. A CR survey from earlier this year found that consumers paid an average of $66 per month for internet service. Coupled with other costs and the hardships posed by the pandemic, this is simply too expensive for many families. Borrowing from a very old cable law, Congress could require ISPs to offer a “basic service” package for all consumers that provides affordable, reliable broadband at speeds that are required for today’s bandwidth-heavy applications. Comcast is already doing this in some fashion (originally as a condition to its acquisition of NBC Universal in 2011), so the idea is not exactly a stretch.
These are but a few ideas to increase broadband access and affordability. This isn’t rocket science and it should not be a partisan issue. The internet has proven obvious and essential for Americans to succeed in the 21st century economy.
With Congressional funding and a new grant of authority and purpose at the FCC to treat broadband like the essential utility service that it is, the government can—and must—connect many more Americans to the internet and to each other.
Jonathan Schwantes is a senior policy counsel in Consumers Reports’ Washington DC office where he focuses on telecommunications issues affecting consumers in the broadband, television, media, and wireless markets.
Filed Under: broadband, essential, fcc, internet access, public utility