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Broadband's Impact

Cisco Study Shows Wireless Data Use Rising Faster Than Expected

WASHINGTON, March 7, 2011 – A study to track and forecast trends in the global mobile network that was released by Cisco Systems last month shows that mobile internet traffic is rising faster than expected.

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WASHINGTON, March 7, 2011 – A study to track and forecast trends in the global mobile network that was released by Cisco Systems last month shows that mobile internet traffic is rising faster than expected.

The white paper study, which was focused mobile video networking, showed strong data about the world mobile network as a whole. For example, mobile network data traffic almost tripled from 2009 to 2010.  The data attributed most of the growth to smartphone adaptation worldwide. The average amount of traffic per smartphone in 2010 was 79 MB per month, up from 35 MB per month in 2009. The rise in the newly popular tablet format also made strong inroads to mobile data traffic with a healthy 405 MB per month.

Cisco also showed that overall data usage is spread more evenly across the market, with high-bandwidth users are accounting for a smaller percentage of the overall traffic. The study showed that the top 1 percent of mobile data subscribers generated more than 20 percent of mobile data traffic, down from 30 percent one year ago. Similarly, the top 10 percent of mobile data subscribers now generate approximately 60 percent of mobile data traffic, down from 70 percent at the beginning of the year. The Cisco survey also showed 40 percent of smartphone Internet use takes place in the home, 25 percent at work, and the rest occurs in transit.

Cisco also indicates that smartphone adoption is growing faster than predicted.

“We expected that the smartphone installed base would increase 22 percent in 2010,” said the study, “but Informa Telecoms and Media data indicates that the number of smartphones in use grew by 32 percent during the year.”

Cisco predicts that by 2015 the average smartphone user will generate 1.3 GB of traffic per month, or more than 16 times the current average use.  The study also projected 788 million Internet users who rely solely on the mobile internet by the same time. Cisco cited a recent survey by Ofcom – Great Britain’s telecom regulator – which indicates that the percentage of Internet users who have “gone wireless” and substituted wireless broadband for traditional wired broadband is 6 percent in the United Kingdom, 11 percent in Germany, and 13 percent in Italy. These users generate much more traffic than users who use mobile broadband in tandem with a wired network.

If current trends continue, millions of people around the world will have cell phones but no electricity at home and by 2015 a majority in the Middle East and Southeast Asia will live “off-grid, on-net.”

The whitepaper also included  a case study of the impact of tiered pricing on data usage on mobile networks. These plans either slow users’ connections or cut them all together after they reach a certain data limit. The case study was based on the months immediately preceding and following the implementation of tiered pricing and found tiered pricing schemes did not immediately affect the growth in mobile traffic. Three months after the introduction of tiered pricing, 20 percent of smartphone users were on tiered plans, but traffic growth continued at the same rate compared to growth rates in the 6 prior months.

Nate Hakken is a native of Washington, DC. As the son of two itinerant academics, Nate spent much of his childhood living in England and Scandinavia. He has a B.A. from Sarah Lawrence College, as well as a J.D. from Vermont Law School, where he studied Internet and technology law. Nate is a jack-of-all-trades, having worked as a sound engineer, teacher, camp director, outdoor adventure guide, and medical researcher. Outside of work, he is an avid cyclist who competes across the Mid-Atlantic and has been known to play the guitar when asked nicely.

Broadband's Impact

House Bill to Make Broadband Grants Non-Taxable Introduced

Sen. Mark Warner said last month he is working to pass a companion bill by year’s end.

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Photo of Rep. Mike Kelly, R-Penn.

WASHINGTON, December 7, 2022 – Reps. Mike Kelly, R-Penn., and Jimmy Panetta, D-Ca., on Wednesday introduced the Broadband Grant Tax Treatment Act, the companion of a Senate bill of the same name, which would make non-taxable broadband funding from the Infrastructure Investment and Jobs Act and the American Rescue Plan Act.

The bill’s supporters say it will increase the impact of Washington’s broadband-funding initiatives, the largest of which is the IIJA’s $42.45 billion Broadband Equity, Access, and Deployment program. The IIJA allocated a total of $65 billion toward broadband-related projects.

Kelly said the proposal “ensures federal grant dollars, especially those made available to local governments through pandemic relief funding, will give constituents the best return on their investment.”

“This legislation allows for existing grant funding to be spent as effectively as possible,” Kelly added.

Sen. Mark Warner, D-Va., sponsored Senate’s version of the bill in September and said last month he is working to push it through by year’s end.

“Representative Panetta’s and Kelly’s bill to eliminate the counter-productive tax on broadband grants is right on the money,” said Jonathan Spalter, president and CEO of trade group US Telecom. “Closing the digital divide in America – especially in our hardest-to-reach rural communities – will require every cent of the $65 billion Congress has dedicated for that critical purpose.”

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Digital Inclusion

Broadband is Affordable for Middle Class, NCTA Claims

According to analysis, the middle class spends on average $69 per month on internet service.

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Photo of Rick Cimerman, vice president of external and state affairs at NCTA

WASHINGTON, November 22, 2022 – Even as policymakers push initiatives to make broadband less expensive, primarily for low-income Americans, broadband is already generally affordable for the middle class, argued Rick Cimerman, vice president of external and state affairs at industry group NCTA, the internet and television association. 

Availability of broadband is not enough, many politicians and experts argue, if other barriers – e.g., price – prevent widespread adoption. Much focus has been directed toward boosting adoption among low-income Americans through subsidies like the Affordable Connectivity Program, but legally, middle-class adoption must also be considered. In its notice of funding opportunity for the $42.5-billion Broadband Equity, Access, and Deployment program, the National Telecommunications and Information Administration required each state to submit a “middle-class affordability plan.”

During a webinar held earlier this month, Cimerman, who works for an organization that represents cable operators, defined the middle class as those who earn $45,300–$76,200, basing these boundaries on U.S. Bureau of Labor statistics for 2020. And based on the text of an Federal Communications Commission action from 2016, he set the threshold of affordability for broadband service at two percent of monthly household income.

According to his analysis, the middle class, thus defined, spends on average $69 per month on internet service. $69 is about 1.8 percent of monthly income for those at the bottom of Cimerman’s middle class and about 1.1 percent of monthly income for those at the top. Both figures fall within the 2-percent standard, and Cimerman stated that lower earners tended to spend slightly less on internet than the $69-per-month average.

Citing US Telecom’s analysis of the FCC’s Urban Rate Survey, Cimerman presented data that show internet prices dropped substantially from 2015 to 2021 – decreasing about 23 percent, 26 percent, and 39 percent for “entry-level,” “most popular” and “highest-speed” residential plans, respectively. And despite recent price hikes on products such as gas, food, and vehicles, Cimerman said, broadband prices had shrunk 0.1 percent year-over-year as of September 2022.

Widespread adoption is important from a financial as well as an equity perspective, experts say. Speaking at the AnchorNets 2022 conference, Matt Kalmus, managing director and partner at Boston Consulting Group, argued that providers rely on high subscription rates to generate badly needed network revenues.

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Broadband's Impact

Federal Communications Commission Mandates Broadband ‘Nutrition’ Labels

The FCC also mandated that internet service provider labels be machine-readable.

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Federal Communications Commission Chairwoman Jessica Rosenworcel

WASHINGTON, November 18, 2022 – The Federal Communications Commission on Thursday afternoon ordered internet providers to display broadband “nutrition” labels at points of sale that include internet plans’ performance metrics, monthly rates, and other information that may inform consumers’ purchasing decisions.

The agency released the requirement less than 24 hours before it released the first draft of its updated broadband map.

The FCC mandated that labels be machine-readable, which is designed to facilitate third-party data-gathering and analysis. The commission also requires that the labels to be made available in customers’ online portals with the provide the and “accessible” to non-English speakers.

In addition to the broadband speeds promised by the providers, the new labels must also display typical latency, time-of-purchase fees, discount information, data limits, and provider-contact information.

“Broadband is an essential service, for everyone, everywhere. Because of this, consumers need to know what they are paying for, and how it compares with other service offerings,”  FCC Chairwoman Jessica Rosenworcel said in a statement. 

“For over 25 years, consumers have enjoyed the convenience of nutrition labels on food products.  We’re now requiring internet service providers to display broadband labels for both wireless and wired services.  Consumers deserve to get accurate information about price, speed, data allowances, and other terms of service up front.”

Industry players robustly debated the proper parameters for broadband labels in a flurry of filings with the FCC. Free Press, an advocacy group, argued for machine-readable labels and accommodations for non-English speakers, measures which were largely opposed by trade groups. Free Press also advocated a requirement that labels to be included on monthly internet bills, without which the FCC “risks merely replicating the status quo wherein consumers must navigate fine print, poorly designed websites, and byzantine hyperlinks,” group wrote.

“The failure to require the label’s display on a customer’s monthly bill is a disappointing concession to monopolist ISPs like AT&T and Comcast and a big loss for consumers,” Joshua Stager, policy director of Free Press, said Friday.

The Wireless Internet Service Providers Association clashed with Free Press in its FCC filing and supported the point-of-sale requirement.

“WISPA welcomes today’s release of the FCC’s new broadband label,” said Vice President of Policy Louis Peraertz. “It will help consumers better understand their internet access purchases, enabling them to quickly see ‘under the hood,’ and allow for an effective apples-to-apples comparison tool when shopping for services in the marketplace.”

Image of the FCC’s sample broadband nutrition label

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