Competition and Access Remain Strong in Broadband Marketplace, Industry Tells FCC

The FCC's "primary focus should be upon tightening" broadband data collection (BDC) reporting and "making the national broadband map a far more reliable baseline" for analysis and decision-making, said NTCA. The group urged the FCC to "think more critically about how to use BDC data and the national broadband map in a prudent and nuanced manner."

The broadband market "remains healthy and competitive," the International Center for Law & Economics commented. However, it warned "new and forthcoming regulations threaten broadband competition by eliminating or proscribing the policies and practices by which providers compete." The Free State Foundation urged the FCC to address spectrum availability, asking the commission to release more mid-band spectrum for commercial wireless services and "refrain from rate regulation of broadband that harms financial returns and incentives for new network investment." FSF also opposed restricting video service pricing options. The Wireless ISP Association said the FCC should "continue to promote accelerated deployment of" broadband by "allocating additional spectrum for both end-user and back haul."

The wireless industry "continues to thrive" with "strong consumer demand and competition among providers," said CTIA. The group noted that 5G devices are expected to account for 91% of all wireless connections in the U.S., with 5G "being leveraged to deliver broadband to the home, bringing new competition to the home broadband market as well." Fixed wireless access "continues to be a competitive and significant market actor," the Wireless Infrastructure Association said, adding that continued growth in the service will "play a critical role in bridging the digital divide."

Fiber is the "fundamental communications infrastructure for all 21st century communications networks," the Fiber Broadband Association said, noting 5G wireless networks also rely on fiber. FBA said fiber is the "fastest growing fixed communications network technology in the nation's history." The number of all-fiber deployments increases more than 10% annually on average, it added.

Some commenters raised concerns about broadband affordability with the end of the FCC's affordable connectivity program. Portland, Oregon, said the city's digital divide "will likely persist or even worsen in the coming years" owing to "near monopoly or duopoly market conditions" in addition to ACP's end.

Consumers are "experiencing high quality broadband for a lower price," said USTelecom. The group also cited an increase in adoption as a result of "steady deployment, greater availability, increased speeds, and declining prices." USTelecom said continuing programs like ACP is "critical to ensure that low-income Americans can access high-speed connectivity, closing gaps in adoption."

Broadcasters and MVPDs told the FCC that since their industries are facing increasing competition from streaming, they shouldn’t face burdensome regulation.

“The growth and development of the internet, along with the near ubiquity of digital devices,” have “transformed the advertising market and undermined the economic bases supporting the public’s free” over-the-air (OTA) radio and TV services, NAB said. Said NCTA: Programming networks and distributors “must compete fiercely not only with each other, but also with a broader universe of entertainment options that includes gaming, virtual reality, e-sports, social media, and more.” As such, "these changes in the video and entertainment marketplaces should prompt a rethinking of how cable and other legacy video services are regulated.”

For instance, FSF, DirecTV, NCTA and other MVPD interests said the agency shouldn’t impose additional burdens on MVPDs, such as all-in pricing and blackout rebates. “The marketplace significance of MVPDs has diminished to an extent that Commission’s existing framework for one-sided regulation can no longer be justified,” said FSF. The FCC “should halt its pending one-sided MVPD rulemakings as initial steps in a prompt transition to a free-market approach,” FSF said. “Such regulations will ultimately harm consumers by distorting the marketplace further in favor of largely unregulated streaming service,” NCTA said. The rules apply to MVPDs but not their streaming competitors, ACA Connects noted. “This lack of parity in Commission proceedings makes it harder for MVPDs to compete, and leaves consumers worse off.” Such rules encourage small cable providers to leave the business, ACA said.

Several MVPDs said they are caught between rising programming costs and rising retransmission consent fees. There’s been a “shift of power” to programming networks that own streaming services, EchoStar said, pointing to Comcast, Fox, Disney, Warner/Discovery, and Paramount. “Most of these groups are vertically integrated with their own means of distribution,” creating “built-in incentives for these groups to favor their own distribution conduits all the way to the consumer and in the process handicap independent distributors.” Those companies require MVPDs to purchase bundles of programming, while holding back popular content that is exclusively streamed on their platforms, EchoStar said.

The Motion Picture Association, which includes Disney, Paramount and Netflix, said the FCC should reject requests for regulating online video providers. Footnotes in the filing reference broadcaster calls for reopening the record on reclassifying virtual MVPDs. “The FCC lacks the requisite legal authority” for regulating online video, and “no record evidence compellingly demonstrates market failure with respect to online video services,” MPA said.

Retransmission consent “has devolved into a mechanism that traps MVPDs in a vicious cycle,” where they can either raise rates to absorb increasing retrans fees or suffer blackouts on broadcast stations, DirecTV said. “Either result -- whether service is disrupted by a broadcaster blackout or the value proposition is eroded by subscription rate increases -- drives MVPD subscriber dissatisfaction,” DirecTV said. Retrans fees have increased 6,710% in the past 18 years, ACA Connects said.

NAB faulted MVPDs for retransmission consent impasses, and blasted NCTA and ATVA for touting tougher broadcast ownership regulations at the FCC. The trade groups are pursuing “a deliberate competitive strategy to use the Commission to advantage subscription video services in the marketplace by increasing burdens on, and reducing the competitiveness of, the free OTA broadcast industry.” In their comments on the 2024 report, ACA, EchoStar and DirecTV said broadcast consolidation is a cause of rising retrans fees and said the FCC should remove broadcast ownership loopholes. Broadcasters “continue to abuse the system by entering into shared service agreements, joint sales agreements, and other arrangements that surreptitiously enable control over ‘sidecar’ stations despite Commission limitations on consolidation,” DirecTV said.

The FCC has ignored the will of Congress by failing to relax broadcast regulations as competition from internet sources has intensified, NAB said. The FCC “still refuses to admit that these transformative changes should in any way impact its broadcast regulatory regime or even to recognize that regulation is not costless,” NAB said. If the FCC doesn’t relax rules to allow broadcasters to compete, it could shift to a less regulated regime, NAB added. The FCC “must ensure that its regulatory framework enables TV and radio stations to serve the public interest and their communities of license” and that means “broadcasters must remain economically viable in a highly competitive marketplace.” The agency’s policies “significantly hamper the ability of local stations to provide valued -- and increasingly expensive -- programming to their communities,” NAB said. It called on the FCC to “carefully analyze all the non-broadcast sources of competition to local radio and TV stations in its upcoming report.”