Jonathan Spalter

Context and Facts Matter: A Response to the White House Executive Order Fact Sheet

This morning, the White House issued a fact sheet previewing a sweeping Executive Order on Promoting Competition in the American Economy.

First reaction: context and facts matter. Context and facts about the performance and track record of broadband providers and the overall state of today’s red hot communications marketplace is key to making rational and productive decisions about connectivity policy.

Unfortunately, when it comes to its comments on broadband, context and facts are largely missing from the Executive Order’s fact sheet.

In a year when the cost of most goods and services has been going up, the price of broadbandat all price points – went in the opposite direction. This is a continuation of a years-long, downward trend in broadband prices that coincides with accelerating speeds that have unlocked broadband-fueled innovation across the country. The truth is: more Americans have less expensive, more reliable and better broadband service choices today than they did one year ago. In addition, American consumers enjoy twice the facilities-based competition as their EU counterparts and new competitive services and technologies are announced regularly.

You wouldn’t know any of this from reading the Executive Order exhumed from some time capsule in an alternate universe. To look back on the last 15 months and the explosion of streaming, zooming, distance learning and digital transformation – made possible by the world’s best performing and most resilient networks – and conclude that America has a net neutrality crisis is neither a credible nor productive policy debate 15 years on. Ideological? Yes. Common sense? No. Fact-based? Certainly not.

Here is the threshold question that policymakers on both sides of the aisle should ask: will this get us to 100 percent connectivity and solve the access and affordability challenges facing pockets of our country? Will it incentivize investment and innovation? Government-owned broadband can’t do it. Reviving calls for old school utility-style regulations won’t do it either – especially because providers are already lock step opposed to blocking, throttling, anti-consumer and anti-competitive prioritization. That dog won’t hunt.

The whiff of rate regulation referenced in the White House fact sheet is also concerning. Washington shouldn’t be setting broadband prices in a competitive market with lots of consumer choice. Government regulating prices in one of the country’s most dynamic industries is chilling and counterproductive to our shared goal of connecting everyone, everywhere.

Broadband deployment is hard and capital intensive work. Providers in every corner of the country – from local Main Street companies to global technology leaders – are investing nearly $80 billion dollars annually to connect communities, upgrade infrastructure, bolster speeds and innovate across their networks. Today. Right now.

Collectively broadband providers have invested $1.8 trillion over the last 25 years to build the connectivity infrastructure that carried the country through the worst of the pandemic and delivered (literally, delivered) a technology and economic boon to the country.

Providers of all sizes are also investing in a range of affordability solutions. We know connectivity gaps remain in parts of America. This is unacceptable. But private investment alone cannot finish the job of connecting every home and business.

That’s why this is an important and pivotal moment in Washington, that can’t slip away. Our government partners have expressed a willingness to make the necessary investments alongside our own to make us a fully connected broadband nation. We’re all in.

Let’s look to the future with connectivity policy that reflects the contribution and experience of the broadband provider community, not old ideas based on tired presumptions suited for another time and place in our dynamic and connected lives. We’re committed to that partnership more than ever.

The Facts About Broadband:

2021 Broadband Pricing Index Report

  • The price of the most popular tier of broadband service has declined by 7.5 percent YOY; a one-year price decline of 9.3 percent when adjusted for inflation.
  • The price for the highest speed broadband service offering declined by 2.3 percent YOY; a one-year price decline of 4.2 percent when adjusted for inflation.
  • These broadband price declines (from 2020-2021) occurred at a time when the cost of overall goods and services increased by 1.9 percent.
  • A forthcoming USTelecom study also reveals that entry-level pricing is declining significantly as well.

o   The intensely competitive U.S. broadband marketplace is reflected in price declines of 22.9 percent from 2015-2021 and 9.1 percent in the past year alone.

o   Adjusted for inflation, these entry-level price cuts translate into real consumer savings of 31.2 percent over the six-year period and 10.8 percent from 2020-2021.

o   From 2015 to 2021, download speeds for entry-level services increased by 161.9 percent, including a staggering 94.2 percent leap in the past year alone.

Government Broadband Networks Aren’t Built for the Long Haul

  • Broadband is not a set it and forget it technology. Government broadband deployments at all scales frequently have struggled to remain solvent, even with financial subsidies, let alone keep up with the pace of technology to do frequent network upgrades and ensure cybersecurity protections.
  • Local governments are focused on governing, and possibly building and maintaining static infrastructure such as roads, sewers and bridges – not running technically complex dynamic broadband networks.
  • A better model to help finish the connectivity job: government can deepen its partnership with private broadband innovators to serve communities while lowering the barriers to deployment that saddle projects with red tape and wasteful delays.

American Broadband: Setting the Pace for Global Competitiveness

  • FCC data shows the percentage of Americans with access to two or more broadband service providers increased four times between 2015 and 2019.
  • In the same period, 16 times as many households had access to three or more providers.
  • U.S. consumers enjoy twice the facilities-based competition as their EU counterparts.
  • 92 percent of Americans have access to 100 Mbps speeds – up from only 10 percent a decade ago.
  • 87 percent of Americans have access to Gigabit speeds today – this technology simply was not available a decade ago.

USTelecom is the national trade association representing technology providers, innovators, suppliers, and manufacturers committed to connecting the world through the power of broadband.