The Federal Communications Commission on Friday issued its annual broadband deployment report, finding for the third straight year that broadband is "being deployed to all Americans in a reasonable and timely fashion."

The FCC is required to report on broadband progress annually under Section 706 of the Telecommunications Act of 1996. Pai's Republican majority pointed to the FCC's deployment data to argue that broadband networks are expanding fast enough to serve all Americans, despite the three biggest ISPs—Comcast, AT&T, and Charter—lowering capital expenditures.

Pai's conclusion is based on ISPs' filings to the FCC, which are known to overcount the number of Americans who have broadband access. The FCC report also failed to consider whether data caps and broadband prices are impeding progress toward universal broadband access.

The annual report's finding can have an impact on policymaking. The FCC is required to take further action to accelerate broadband deployment if it finds that it isn't happening quickly enough.

Pai touts his leadership

Going back to his time as an FCC commissioner during the Obama administration, Pai has repeatedly argued that government regulation slows broadband investment and promised that his deregulatory agenda would cause investment to rise. This year, he pointed to industry research that found capital expenditures rose from $76.9 billion in 2017 to $80 billion in 2018. But the report didn't mention the more recent spending declines at Comcast, AT&T, and Charter.

As we previously reported, Comcast lowered capital expenditures in its cable division by 10.5 percent in 2019, reducing the annual total to $6.9 billion. AT&T announced in October that it is lowering capital investment from $23 billion in 2019 to $20 billion in 2020, and Charter cut capital expenditures from $9.1 billion in 2018 to $7.2 billion in 2019.

"Under my leadership, the FCC's top priority is to close the digital divide, and I'm proud of the progress that we have made," Pai said in a press release Friday. "Having grown up in rural Kansas, I have a deep commitment to expanding broadband to all corners of the country. That's why we've taken aggressive steps to remove regulatory barriers to broadband deployment and reform our Universal Service Fund programs."

In previous years, Pai used the annual report to take credit for broadband deployment projects that were started during the Obama administration and claimed that his deregulatory policies were speeding up deployment even though broadband grew at similar rates during the Obama years.

Report is “baffling,” Democrat says

The FCC's two Democrats disputed Pai's conclusions. Commissioner Jessica Rosenworcel said:

This report is baffling. We are in the middle of a pandemic. So much of modern life has migrated online. As a result, it has become painfully clear there are too many people in the United States who lack access to broadband. In fact, if this crisis has revealed anything, it is the hard truth that the digital divide is very real and very big. But you'll find no evidence acknowledging that in today's Broadband Progress Report from the Federal Communications Commission. Instead, you'll find a glowing assessment that all is well. According to this rosy report the nation's broadband efforts are all good. They are proceeding in a reasonable and timely fashion and they are reaching all Americans. This is just not right.

Among other things, Rosenworcel pointed out that people without broadband access are sitting in cars "in front of shuttered libraries and coffee shops, just to pick up a free Wi-Fi signal" during the pandemic.

FCC: 18.3 million people lack access

The report said that as of year-end 2018, 308.9 million out of 327.2 million Americans had access to fixed broadband with speeds of at least 25Mbps downstream and 3Mbps upstream, the FCC broadband speed standard that hasn't been updated since 2015. The percentage of Americans with 25/3Mbps access rose from 93.5 percent to 94.4 percent from 2017 to 2018. Those numbers exclude satellite service, which has poor latency and restrictive data caps, making it a poor substitute for cable or fiber. (SpaceX's satellite service may change that, but it isn't available yet.)

That leaves 18.3 million Americans who live in areas that don't have what the FCC considers modern home-Internet service. The 94.4 percent and 18.3 million figures are in the report but aren't mentioned in the press release Pai issued to tout the broadband industry's progress. The press release said that "the number of Americans lacking access to fixed terrestrial broadband service at 25/3Mbps continued to decline, going down by more than 14 percent in 2018 and more than 30 percent over the course of 2017 and 2018."

Real number may be much higher

The 18.3-million number "wildly understates the extent of the digital divide in this country," Rosenworcel said. "That's because if a broadband provider tells the FCC that it can offer service to a single customer in a census block, the agency assumes that service is available throughout [the census block]." Rosenworcel was referring to the Form 477 reports that ISPs are required to submit.

The real number of Americans without access to wired or fixed wireless broadband is 42.8 million, a February 2020 study by BroadbandNow found.

The FCC in August 2019 finally ordered ISPs to submit geospatial maps of where they provide service instead of merely reporting which census blocks they offer service in. But this more accurate data isn't available yet. "[D]espite its deficiencies, Form 477 data remains the most comprehensive, reliable data available to us to meet our statutory obligation" to report annually on deployment progress, the FCC said.

There have been some big errors in the Form 477 data that relies on ISPs' census-block filings. Last year, Pai had to correct the annual broadband report after a new ISP called BarrierFree falsely told the FCC that it went from serving zero customers to 20 percent of the country in just six months. The FCC didn't notice the mistake, which was discovered by consumer-advocacy group Free Press.

Earlier this month, AT&T disclosed to the FCC that it provided false coverage data in parts of 20 states. The FCC hasn't said whether it will investigate the rest of AT&T's broadband data to verify its accuracy.

Like Rosenworcel, Democratic Commissioner Geoffrey Starks said he can't support the conclusion that broadband is being deployed to everyone on a reasonable and timely fashion. "In light of the struggles many Americans have faced over the last six weeks, it is especially perplexing and disturbing that the majority would cast this report as a victory lap," Starks said. "Too many Americans cannot access online work, medical help, and distance learning because broadband is too expensive or not available."