Competition/Antitrust

Federal Communications Commission Chairwoman Jessica Rosenworcel responded to a letter from a group of senators regarding broadband consumer labels and pricing transparency. Specifically, Sens Ben Ray Lujan (D-NM), Tammy Duckworth (D-IL), Tammy Baldwin (D-WI), Cory Booker (D-NJ), and Amy Klobuchar (D-MN) urged the FCC to independently collect pricing data as the Commission fulfills its requirement of providing internet service provider (ISP) broadband consumer labels. In her response, Chairwoman Rosenworcel highlighted two actions taken by the Commission in late 2022.

Some people in the telecommunications industry like to compare the copper or fiber lines transmitting data under our feet to railways. They are both natural monopolies, they argue: duplication is wasteful, the high costs of construction deter new entrants, and economies of scale are essential for survival. But laying fiber costs much less than laying a railway track. The very fact that over 100 alternative network providers — or “altnets” — have popped up, backed by billions in private capital, suggests the financial incentives are there to multiply the infrastructure.

Cable companies’ wireless offerings are a bigger threat to wireless providers than wireless providers’ broadband offerings are to cable companies, according to a new research note from industry financial analysts at SVB MoffettNathanson. It’s a contrarian view at a time when fixed wireless offerings from T-Mobile and Verizon are stealing cable broadband subscribers and the mobile market is heavily saturated. The researchers base their analysis on several key market realities. One of the most critical is that the wireless industry is roughly twice the size of the broadband industry.

Is the broadband industry reaching maturity? There was still significant growth in broadband over the last few years. In 2019, national broadband subscribers grew by 2.6%. That leaped to 4.5% in the 2020 pandemic year. In 2021, broadband growth slowed to 2.8% but rebounded to 3.3% in 2022. The 2022 growth rate is likely inflated by rural broadband growth, as practically all the overall industry growth for the year came from cellular fixed wireless access (FWA) broadband provided by T-Mobile and Verizon. What would a mature broadband market look like?

Fiber-focused Frontier Communications and cable giant Charter Communications each took some hits and scored some points in a series of clashes over marketing claims related to their respective broadband products. Frontier scored a key win as the National Advertising Division (NAD) recommended Charter qualify some of its speed claims to note they’re not symmetrical, while Charter prevailed in challenges related to Frontier’s claims around availability and reliability.

Community decision-making is the foundation of Maine’s DNA. Town meetings, volunteer school boards, and local planning efforts are all central to what makes this Maine. Dozens of communities have started this process with local people identifying locations and groups needing better service to develop plans addressing these gaps. But these community-led efforts are under threat from big monopoly internet service providers, who fear competition will lose customers.

AT&T is on a quest to deploy fiber broadband to 30 million locations by the end of 2025. But if comments from COO Jeff McElfresh are any indication, its ultimate goal could be much, much higher. McElfresh said that despite a choppy economic environment, demand for fiber remains high and its rollout is still delivering the right level of returns. With that in mind, he added, the 30 million target AT&T set in May 2021 is “not the entirety of what I think the market opportunity is there.” “We're going to be on this journey for a while.

I fully expect high-quality wireless internet service providers (WISPs) to be able to compete against fiber networks. While the industry lately seems to be fixated on broadband speeds, there are customers that value other aspects an internet service provider (ISP), such as trust and reliability. I think WISPs (and every other ISP) will have a hard time competing against a cooperative that builds fiber, particularly one that sets low prices like $50 or $60 for a gigabit.

Competition in the broadband industry continues to pick up, which means providers can’t solely rely on high speeds to stand out in the market, according to Calix CEO Michael Weening. Weening explained that due to the emergence of fiber, the difference between a cable company and a telephone company is really “no longer relevant.” “Everybody’s starting to think differently,” he said.

President Joe Biden’s administration has set an ambitious goal to deliver Internet for All using $42.5 billion in funding from the Broadband Equity, Access, and Deployment (BEAD) program. It’s not entirely clear how realistic that goal is.