Broadband Roundup: FCC’s Wheeler Continues Net Neutrality Quest, FCC Wireline Bureau Benchmarks Broadband Data for Connect America Fund

WASHINGTON, July 1, 2014 – Republicans are concerned about the regulation of internet service providers as utilities under Title II of the Communications Act, but Federal Communications Chairman Tom Wheeler said that he isn’t ruling out the section as a legal basis for agency authority. In a letter responding to concerns from House Speaker John Boehner, R-Ohio, about net neutrality, he said, “Section 706 gives the commission the tools to adopt and implement robust and enforceable Open Internet rules.”

That said, “both Section 706 and Title II are viable solutions to the authority issue,” Wheeler wrote. Should the agency seek to reclassify internet services, it would look to see which common-carrier provisions from which broadband services should be exempt. Further inquiry and public discussion about the matter is necessary before a final decision is made, he said.

The FCC’s Wireline Competition Bureau has set forth a specific methodology for benchmarking various fixed broadband services. It came in a measure regarding the Universal Service Fund and intercarrier compensation, comparing the rate and support for voice and broadband services in supported areas at reasonable rates compared to similar services in urban areas.

“The methodology proposes here would result in a broadband benchmark that ranges from $68.48 to $71.84 for services meeting the current broadband performance standard of 4 Mbps [Megabits per second] downstream/1 Mbps upstream, with the specific benchmark depending on the associated usage allowance.”

The agency’s staff report was posted at http://www.fcc.gov/encyclopedia/urban-rate-survey-data, detailing fixed broadband service data collected in the 2013 urban rate survey. Three potential methods for determining the average urban rate using the data collected in the survey were outlined:

The first approach calculates the average using a sub-sample of observations based  solely on download speed, without regard to usage or upstream speeds.

The second approach calculates the average by identifying the subset of observations  that meet or exceed a minimum service level, and then for each provider that is captured in that sub-sample, computing the average based on the lowest rate offered by that provider that meets or exceeds the specified service level.

The third approach uses a simple weighted linear regression model that takes into account the impact of three dimensions of service on rates: upload speed, download speed, and usage allowance, if any.

The Wireline Competition Bureau also  announced the commencement of the Connect America Phase II challenge process for price cap territories. It encouraged local governments and stakeholders to participate in the challenge. A list of census blocks deemed initially eligible for Phase II support was released.

The FCC said: “This list consists of census blocks that are: (1) shown as unserved by an unsubsidized competitor; (2) “high cost” according to the adopted Connect America Cost Model, which means that the census block has a calculated average cost per location above $52.50 and below $207.81; and (3) located in price cap territories.”

Parties have until August 14, 2014, to file a challenge before the FCC to the “inclusion or exclusion of particular census blocks on the list,” although challenges may only be based on the first criterion. The FCC  will then “make its final determination as to whether the challenged census blocks will be treated as served or unserved by an unsubsidized.”