Press Release Managed IT Services

Broadband ain't broadband, in the US at least

The US Government clearly believes some rigour in the definition of broadband is essential. It has for some time defined broadband as a minimum of 4Mbps downstream and 1Mbps upstream. However the Federal Communications Commission (FCC) has just revised that upwards very substantially, to 25Mbps/3Mbps.

The move is not purely a definitional clarification. Last week we discussed the issues thrown up by the lack of any precise definition of broadband and the variability in performance experienced by users, often those on the same network. In particular, we examined Deloitte's discussion of the problem in its 2015 Technology, Media & Telecommunications Predictions, where it said: "The variability in speed attained at the device has major implications for the addressable audience for any online service.”

Back to the USA where FCC chairman, Tom Wheeler, was reported saying the up-speeding of broadband reflected the tremendous growth in consumer data consumption, the growing popularity of services like Netflix, and the need to create a future-proof standard.

The decision was not without controversy.

It was opposed by the two Republicans on the Commission who branded it an overreach of the agency's authority. One of them, Ajit Pai, was reported saying: "Seventy-one percent of consumers who can purchase fixed 25 Mbps service -- over 70 million households -- choose not to." However an FCC report estimates that 20 percent of the rural population cannot even get broadband at the previous 4Mbps rate.

Nor did the outcome entirely please Democrat Commission members even though they voted in its favour. One, Jessica Rosenworcel, was said to have wanted a 100Mbps minimum downstream speed and was reported saying "Anything short of that short changes our children, our future, and our new digital economy.” (Australia please take note)

Curiously, while the FCC's decision was widely reported in the US press there was very little commentary and information on what it actually means. Presumably service providers will have to re-write much of their advertising material and remove the term 'broadband' from the description of any service that does not meet the new definition.

An interesting take on the move came from Time Magazine, which suggested that it could stymie Comcast's $US45.2 billion takeover bid for Time Warner cable. Under the old definition Comcast was able to claim that, if it acquired Time Warner, it would have only a 35.5 percent share of the broadband market and therefore would not be monopolistic broadband provider. Under the new definition a combined Comcast and Time Warner would have a market-dominating share of 70 percent, on some estimates.

It's not beyond the bounds of possibility that one day the ACCC might be faced with a similar problem.


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