The Federal Communications Commission is sticking to its guns when it comes to the state of high speed Internet deployment in the United States. Despite last year's protests from the cable industry, the agency's Seventh Broadband Progress Report reiterates the conclusion of its sixth survey. As many as 26 million Americans dwell in cities, towns, and counties in which there is no broadband capable of delivering video, graphics, data, and high quality voice services at affordable prices.

Many Americans live in rural areas "where there is no business case to offer broadband," the survey notes, "and where existing public efforts to extend broadband are unlikely to reach; they have no immediate prospect of being served, despite the growing costs of digital exclusion."

And about one-third of consumers do not subscribe to any kind of broadband service, the report concludes. Subscribership runs at around 67 percent of Americans, as opposed to adoption rates of over 90 percent in South Korea and Singapore. US consumers say they can't afford it, they don't know how to use it, or they just can't see the point in going online. Four out of five schools funded by the FCC's E-Rate computer/network equipment subsidy program say their connections are inadequate.

"These data provide further indication that broadband is not being reasonably and timely deployed and is not available to all Americans," the report concludes.

The "reasonable and timely" phrase is key to this document. It is called a "Section 706" report because that portion of the Telecommunications Act of 1996 requires the FCC to annually determine whether broadband "is being deployed to all Americans in a reasonable and timely fashion."

An FCC thumbs-down on the reasonable/timely question has significant implications. The law says that in that instance, the Commission should take "immediate action to accelerate deployment of such capability by removing barriers to infrastructure and investment and by promoting competition in the telecommunications market."

Here's how the FCC came to its latest conclusions.

Points of departure

Last year's assessment and this report are the first that abstain from declaring the nation's broadband progress to be "overall" reasonable and timely. They're also the first to define broadband as 4Mbps downloads, rather than the prior benchmark of 200Kbps downloads.

4Mbps is the "minimum speed required to stream a high-quality—even if not high-definition—video while leaving sufficient bandwidth for basic web browsing and e-mail, a common mode of broadband usage today," the 2010 document observed.

In another departure, this new survey takes its findings from the government's National Broadband Map, commissioned by the American Recovery and Reinvestment Act, and released about three months ago. The map mines US census block data and offers detailed county-by-county information on broadband deployment speeds and ISP availabilities.

This report also defines "deployment" not just in physical roll-out terms, but whether broadband services are fast enough and affordable.

The Commission's report justifies this shift as so:

The legislative history of section 706 further supports the view that Congress expects us to examine more than physical availability. The Senate Report explains that the Commission "shall include an assessment... of the availability, at reasonable cost, of equipment needed to deliver advanced broadband capability." The Senate Report also states that the goal of section 706 is "to promote and encourage advanced telecommunications networks, capable of enabling users to originate and receive affordable, high-quality voice, data, image, graphics, and video telecommunications services." Broadband service that is not, for example, of a quality sufficient to enable high-quality voice, data, image, graphics, and video telecommunications services does not satisfy these goals.

Based on these assumptions and map analysis, the FCC estimates that 26.2 million Americans who live in around 9.2 million households are "unserved" by broadband. Specifically, 782,267 out of the 4.5 million census blocks in the United States and its territories for which the US has data remain unserved.

Lack of relevance

These neglected areas are, not surprisingly, full of lower-income people. "On average, unserved Americans live in areas that are more rural and less densely populated," the latest report says, "and in which larger proportions of residents are lower-income, less-educated, and more likely to self-identify as being White than in areas served with broadband."

For lower-income Americans, cost is a huge factor in non-adoption. Fifteen percent of respondents to FCC surveys say that the typical monthly ISP bill is too high. Nine percent say installation and other fees are too expensive. Ten percent say it's the cost of equipment that discourages them from buying broadband at home.

Meanwhile, 19 percent of US consumers cite "lack of relevance" as the major reason why they don't hook up to a broadband ISP: "They note, specifically, that they believe there is little if anything that they want to see or do online, or that their current dial-up Internet access service is sufficient for their needs."

Dial-up Internet users constitute a "disproportionate" number of disinterested consumers, the FCC says. Many lack the digital skills they need to handle 'Net access. Others tell government surveys that they are afraid that their privacy will be breached, or their children will be able to view what they experience as inappropriate content.

An attempted reinterpretation

Robert M. McDowell, the FCC's sole Republican on the Commission (his colleague has famously accepted a job with Comcast), posted a dissent on this report. McDowell takes exception to the expanded definition of deployment. He calls it an overbroad reading of the specific language statute.

"Regrettably, through this attempted re-interpretation of Section 706(b), the Commission appears to continue a trend towards more regulation and ever increasing authority over broadband and the Internet," he warns.

FCC Commission Mignon Clyburn was more sympathetic to the policy change.

"I wholeheartedly agree with the Report that our assessment of broadband availability must include a review of our nation’s adoption of broadband," her statement explained. "Where a broadband-capable network is deployed, but cannot be accessed by some consumers due to, say, the cost of service or equipment—then it is not truly available to those consumers."