At a time when our country is developing a National Broadband Plan, it absolutely makes sense to have a single definition of the term “broadband” for regulatory and policy purposes. The FCC announced last month that it was releasing a Public Notice, requesting input on this issue (The FCC’s Carlos Kirjner discussed this in further detail in a blog post) and on Monday, we filed comments in response to this Public Notice.

It’s worth noting that this isn’t the first time the FCC has visited this issue, since the Commission adopted a new definition just last year in connection with changes to the Form 477 broadband reporting process. The 477 process semi-annually collects information from service providers about broadband connections to households and businesses; info has been collected each year, starting with data as of December 31, 1999.  Last year, the Commission found that services with download speeds of more than 768 kbps and upload speeds of more than 200 kbps will be defined as “broadband” services. Such a definition was important for the NTIA and RUS to have for use in their broadband funding programs.

But, as we say in our filing, we don’t think it would be a good idea for the Commission to use the process of defining “broadband” as a vehicle for imposing obligations or setting goals with respect to factors such as speed, price, symmetry or “openness.”  The definition has been, and should continue to be, simply a way to describe what is being made available to customers.  Any discussion of national broadband goals or potential service provider obligations should be done separately.  As cable’s history of providing faster and faster speeds demonstrates, the FCC’s definition has never served as a constraint on what is offered to consumers. What’s needed is a generic definition that focuses on the core functionality of the broadband service that customers are receiving today.

We identify three key advantages to such an approach:

• Using the definitions already in Form 477 (also used by NTIA in its recent mapping Notice of Funds Availability), will enable the Commission to compare a consistent set of data over time.
• Using those existing definitions will avoid the need to make additional changes to the Form 477 reporting process.
• It’s helpful for government agencies to use a consistent set of definitions.

Consistency is important and if we try to measure aspects at too granular a level, it becomes difficult to achieve such consistency.  For example, some parties have raised concerns about using advertised speeds as the basis for measuring broadband deployment.  In the Notice, the Commission notes that advertised speeds “generally differ from actual rates, are not uniformly measured, and have different constraints over different technologies.”  But simply requiring providers to report “actual” speed won’t lead to more meaningful information because there is no uniformity in how it is measured and there are numerous factors beyond the control of the provider that affect upload and download speeds.  Consequently, in our comments, we encouraged the Commission to work with the Internet engineering community to develop a consistent, uniform, reliable method of measuring “actual” speed before making a change.

There are proponents who argue that symmetry should be required, but most broadband networks are engineered to provide higher speeds for downloading than for uploading. Such an approach is based on consumer preferences and behavior; if symmetrical services are required, that would prevent providers from offering asymmetric services that might better suit the needs of some consumers.

A comparison might be made to creating a definition of a “computer.” Such devices can range from a netbook costing a couple hundred dollars to several thousand for a Mac Pro. The core functionality of various computers is what remains the same. Such a straightforward approach is also best when attempting to define broadband, as it exists at this time.

NCTA has released a new white paper prepared by Microeconomic Consulting & Research Associates, Inc. (MiCRA). The report is entitled Benefits to Consumers from the Transformation of the Cable Industry. In part it is about the cable industry’s transformation from a simple analog video provider to a provider of multiple services over an advanced digital communications platform. But more simply, it’s about the benefits to the consumer of cable’s Triple Play of voice, video and data.

Here’s a typical data point from the report, that shows how far we’ve come over the past decade.

A typical cable subscriber in 1998 paid $27.00 ($37.00 in 2008 dollars) for a few dozen television channels (composed primarily of local broadcast television, local public, educational and governmental (“PEG”) channels, superstations, and a handful of cable networks). In 2008, this same subscriber could purchase a suite of services, for approximately $100 per month, which included digital voice service, high-speed data service, and digital video service offering hundreds of channels of increasingly popular cable network programming, high-definition video quality, and large libraries of on-demand programs.

A look back to the 90s, before our fiber buildout, shows how powerful the impact has been of cable’s improved hybrid fiber-coax architecture. Back in ’98, only a small fraction of subscribers were taking services like digital video, phone and high-speed data access. For example, there were 1.4 million digital subs in ’98 (according to SNL Kagan) and there were 40.4 million in 2008.

In analyzing the power of bundling, the report says:

The marginal cost of providing an additional customer with any of the three services (voice, data, or video) is low because of the large economies of scale in deploying a wireline (or fiber-based) network. Moreover, once a customer has subscribed to one service, the marginal cost of providing that customer with a second and third service is even lower.

In addition, these savings can be passed on; according to the report, “[b]undled services are priced between $5.00 and $50.00 lower than the sum of the prices of the components.” MiCRA estimates that that cable’s investments – $129 billion spent in upgrades between 1999 and 2008 – have resulted in about $35 billion in annual consumer benefits. The study shows that the benefits from offering new services and new service bundles are shared across all demographic groups, including lower-income households.

You can find a copy of the entire report on NCTA’s website.

Not many hours go by in Washington these days without talk of broadband policy, and this week was no different.  At the National Press Club, the Phoenix Center for Advanced Legal & Economic Public Policy Studies released their “Broadband Adoption Index” (or BAI), their methodology to provide a way to evaluate the value of broadband to society.  The BAI demonstrates how the benefits of different broadband technologies can be examined and compared.  The BAI doesn’t just count actual connections, it looks at the “value consumers and society get from adopting various broadband technologies.”

For example, in some countries around the world, mobile or cell phone connections are extremely valuable to those populations.  In remote places where families may not own or have access to personal computers, a cell phone connection is a useful and vital link to the world.  Alternatively, a cell phone connection in a typical American city may be valued much differently than the current 15Mbps cable connection that is currently available in that neighborhood.

The impetus behind the new index is because broadband adoption’s value is currently not weighed and the organization most cited for worldwide broadband data — the Organization of Economic Cooperation and Development’s (OECD) – relies on a flawed methodology that doesn’t take into account household size, which is a huge factor when you compare the U.S. to most other countries.

Problems with OECD rankings are nothing new.  In fact, we’ve talked about issues with that data and U.S. broadband ranking a few times in the past [The Trouble with Broadband Deployment Statistics, All Things Being Equal, Japanese Broadband, and Getting America Connected].  The Phoenix Center contends that their BAI can be a more useful tool since it looks at worldwide broadband adoption rates, rather than the broadband connections per capita OECD uses.

So, how can the BAI useful in a policy arena?  First, the Center mentions the importance of setting targets for broadband adoption and deployment as a nation.  Without a target, how will be know when we’ve achieved success?  Is success for the U.S. when high-speed broadband is available to 100 percent of the population?  Or, is success when 100 percent of the population utilizes broadband technology?  The report also notes that the government has not set a target, so until they do, it will be difficult to measure success, especially in light of the $7 billion in stimulus funds that have been dedicated to broadband.

The Phoenix Center also hopes policymakers look beyond the OECD data and its limitations.  As they note in the executive summary of the report, merely comparing the per-capita adoption rates for two countries with differing demographics, economies, and population density “provides little information relevant to broadband policy.”

While there are many voices talking about broadband policy and strategy, most universally agree a strong broadband infrastructure here in the U.S. is of deep importance for future economic growth, health care, education and jobs.  Cable has already played an important role in broadband deployment thus far, wiring 92 percent of U.S. households for high-speed Internet access.

As the government moves closer to granting its broadband stimulus funds, we’ve outlined what we think should be the guiding principles [video, blog post, white paper].  And we’ve also filed comments in the FCC’s proceeding to craft a national broadband plan, which is scheduled for a early 2010 delivery.

As mentioned previously, we were attending the Personal Democracy Forum earlier this week. Winding up Monday’s session was a panel entitled “The Obama Broadband Initiative and the Future of the Internet,” with opening remarks by Blair Levin of the FCC (video here) and a discussion, moderated by PDF’s Andrew Rasiej, involving Free Press’ Josh Silver, NCTA’s James Assey, and AT&T’s Hank Hultquist.

The WSJ’s Digits blog offered an accounting of the panel:

Panelist Josh Silver, the executive director and co-founder of Free Press, a media advocacy organization, ripped into his co-panelists, who represented the wireless and telecommunications industries.

He accused them of price-gauging Americans on Internet service and monopolizing the industry rather than engaging in competitiveness and helping provide affordable access to the poor. “We’re looking at industries which are protecting a very lucrative business model, and there are starting to be increasing numbers of people at the gates understanding that the ISP market should be competitive,” Mr. Silver said.

It was a very spirited discussion.

Let me quote a few notable remarks on Twitter:

@mikemathieu: AT&T and cable industry reps wriggling on stage as Josh Silver points out price protection schemes of broadband providers.
@zbrisson: One of the best things of the day, Silver from free press calling the cable companies out for their oligarchic greed.
@abenamer: josh silver points out that the lack of competition with the cable and telephone duopoly keeps prices artificially high
@jonathanpberger: The hatred for ATT & Cable co.’s is palpable. The people want blood.

Tough crowd.

Among James Assey’s comments, he pointed out that companies are investing significantly in infrastructure, which will encourage faster speeds. As he put it, “We’re leaning forward to the future.” As we’ve said many times, the cable industry along has invested well over $100 billion since 1996. Assey also noted that there is competition in the broadband marketplace; however, it costs a lot to build & maintain robust broadband networks and private capital is generally required. He also pointed to a recent Pew report (Home Broadband Adoption 2009) that found that value & utility beat availability & price when it comes to why respondents did or did not take broadband.

This national discussion of America’s broadband future is important and we’re committed to taking part in the conversation. We look forward to other events like PDF as the process moves forward.

Rarely a day goes by in DC without a panel discussion, new report or legislative hearing on the importance of broadband. Yesterday, the Pew Research Center’s Internet & American Life Project released a lengthy survey on Home Broadband Adoption. Not only does the study delve into the importance of Internet in the everyday lives of Americans, but it also shows a noteworthy rise in broadband usage over the last year.

The study notes that now, “63% of adult Americans now have broadband internet connections at home, a 15% increases from a year earlier.” That is up from 54 percent in 2007.

In addition, Pew’s study also looked at specific populations, like seniors, rural Americans and lower income households. Some key statistics from the report include:

• “Respondents reporting that they live in homes with annual household incomes below $30,000 experienced a 34% growth in home broadband adoption from 2008 to 2009.”
• “Broadband usage among adults ages 65 or older grew from 19% in May, 2008 to 30% in April, 2009.”
• “Adults living in rural America had home high-speed usage grow from 8% in 2008 to 46% in 2009.”

The broadband adoption numbers have definitely moved upwards in recent years and we should take a moment to applaud this progress. At the same time, there is still work to be done. We should ensure that all American households have access to some kind of broadband connection.

Broadband can be engine of job creation, a facilitator of educational and health care opportunities, and a means of shrinking the distances between isolated communities. Yet, without access, some folks are left behind.

This is why a broadband stimulus package (part of the American Recovery and Reinvestment Act) is so important. The stats demonstrate while broadband usage is going up, there is still a clear need to increase broadband adoption and use.

How these stimulus grant funds are used is critical. Earlier this year, we laid out a few ideas on how program should be structured around the following priorities:

1. Extending broadband facilities to unserved areas.
2. Supporting programs that enable underserved populations to acquire and to make effective use of broadband service where it is already available.
3. If funds remain, extending broadband facilities to underserved areas defined in terms of below-standard speed and other qualitative measures relative to today’s current-generation broadband services.

We’ve talked about the broadband stimulus package several times of the past few months. A white paper we released back in March provides our perspective on how funds should be implemented. And NCTA President & CEO Kyle McSlarrow shares his thought on this issue in this video. We also posted a White Paper from the U.S. Chamber of Commerce about the impact of broadband on senior citizens.