As FCC Flexes Its Regulatory Muscle, It Ignores Its Own Failed Programs

REUTERS/Yuri Gripas

Drew Johnson Contributor
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In January, the Federal Communications Commission released its annual Broadband Progress Report to the public. The FCC’s report indicates that 34 million Americans – about 10 percent – do not have access to broadband Internet. Populations in rural and tribal communities are especially lacking.

The report concludes that broadband internet is “not being deployed in a reasonable and timely fashion to all Americans,” and therefore the FCC will “take immediate action” to increase connectivity and speed.

In a case of deja vu, just five years ago, the FCC came to much the same conclusion in its 2011 Broadband Progress Report stating, “Broadband is not being reasonably and timely deployed and is not available to all Americans.”

However, these more recent findings are at distinct opposition to the Commission’s previous reports. According to the FCC’s numbers, the internet gap appears to be closing rapidly. In 2012, 20 percent of Americans were without reliable access, followed by 17 percent in 2013, and 10 percent in 2014.

FCC Commissioner Michael O’Rielly stated, “I strongly oppose the notion that broadband is not being deployed in a timely fashion,” he said. “Apparently, no amount of progress will ever be good enough for a commission that is bent on regulating broadband at any cost.”

The discrepancy, as O’Reilly’s statement hints at, most likely comes from the politically motivated, Democratic-controlled Commission as an open invitation for additional government regulation into the broadband market.

In just the last year alone, the FCC manipulated markets by rigging the rules of an auction of wireless airwaves to discourage open bidding and reclassifying the Internet as an outdated telecommunication service under Title II of the Communications Act written in 1934.

“ObamaNet,” as some have termed this overreach of the government, is the Obama administration’s next Obamacare; a socialist-flavored “answer” whereby government edicts outweigh real innovation. Under the guise of spreading internet access to the remaining 10 percent of the U.S. population, Internet Service Providers would be required under these new rules to seek FCC approval on any “new products, business models, data-traffic operations, and more.”

And if you think the ISPs are going to eat the costs of the additional accountants and attorneys needed to wade through the 682 pages and 987 rule sections, think again. Those fees, just as has been done with the telephone industry, will be passed on to you, the consumer.

Competition, not regulation and government involvement, is what is needed to improve broadband in America.

Google Fiber’s Milo Medin stated, “Some would argue that regulation is the answer, but I have never seen a company deliver better service because a federal rule existed.” Instead, “what we do need to do is build new networks and deliver better and faster services while offering consumers new choice that replaces bandwidth scarcity with bandwidth abundance.”

Rather than focusing on creating new, overreaching government programs, perhaps the FCC should better oversee its current ones.

Take for example, the Universal Service Fund (USF), a series of fees that the government charges telecom companies, which are then passed onto consumers via their phone bill. The money collected funds four programs: Lifeline, Connect America Fund (formerly and more appropriately named “High-Cost Support”), Schools and Libraries, and Rural Health Care.

Unfortunately, the fund is regularly cited by members of Congress on both sides of the aisle as a poorly designed, woefully administrated waste of tax dollars. Probably the most egregious example of USF abuse is by Alaska-based broadband telecommunications monopoly, GCI.

The state’s largest broadband provider, GCI, gets $170 million, or 74 percent, of the USF funds Alaska receives annually. The USF subsidies going to Alaska are the highest in the nation ­­– nine times higher than the Lower 48, or $234 per person compared to $26 in the rest of the country.

Compound this number over the last decade, and the USF subsidies GCI has received to connect rural online shoppers, gamers, and online binge-watchers are approaching the $1 billion. Despite this incredible cost to phone customers, the FCC’s latest report shows 81 percent of rural Alaska still doesn’t have access to broadband.

ObamaNet is an intrusive, cumbersome and expensive “solution” to a nonexistent problem. While the FCC continues it unrelenting path to rewrite communications, it ignores the corruption and abuse happening in its own program. Perhaps it is time for some self-reflection. But don’t hold your breath. The FCC seems more interested in solving problems that don’t exist than cleaning up its own messes.

Drew Johnson is a Senior Fellow at the Taxpayers Protection Alliance, a nonpartisan, nonprofit organization committed to limited, responsible government.