Sens. Sanders and Warren

Democratic presidential hopeful Sen. Bernie Sanders (Ind.-Vt.) has expressed serious doubts about the claimed consumer benefits of a multi-billion dollar cable company merger between Charter Communications, Time Warner Cable, and Bright House Networks.

In a joint letter with Sens. Al Franken (D-Minn.), Ed Markey (D-Mass.), Elizabeth Warren (D-Mass.), and Ron Wyden (D-Ore.), Sanders told FCC Chairman Tom Wheeler and Attorney General Loretta Lynch the deal would create a “nationwide broadband duopoly, with New Charter and Comcast largely in control of the essential wires that connect most Americans to how we commonly communicate and conduct commerce in the 21st century.”

The senators explained that “broadband service is not a luxury; it is an economic and social necessity for consumers and businesses.”

The five Democrats believe the merger could have negative effects on consumer choice, competition, and innovation in broadband and online video. With Comcast and New Charter controlling at least two-thirds of the high-speed broadband lines in the country, Sanders and his colleagues are concerned this will allow Comcast and New Charter to raise rates while reducing broadband innovation, allowing the United States to fall even further behind other industrialized nations with superior broadband.

The senators asked the Department of Justice and the FCC to carefully evaluate how the proposed deal could impact the marketplace.

“New Charter must not only prove that this deal would not harm consumers, but they must also demonstrate that it would actually benefit them and promote the public interest,” the senators argued.

This week, New Jersey regulators approved the merger transaction in that state, leaving California as the last major challenge for Charter executives. Federal regulators are not expected to rule on the deal until the spring or summer.

Kinzinger

Republican-sponsored H.R. 2666 — the “No Rate Regulation of Broadband Internet Access Act” — is drawing opposition from House Democrats because the measure, if it becomes law, could grant cable and telephone companies broad permanent exemption from oversight and consumer protection laws.

The bill, introduced last summer by Rep. Adam Kinzinger (R-Ill.), consists of a single sentence:

Notwithstanding any other provision of law, the Federal Communications Commission may not regulate the rates charged for broadband Internet access service (as defined in the rules adopted in the Report and Order on Remand, Declaratory Ruling, and Order that was adopted by the Commission on February 26, 2015 (FCC 15–24)).

Eshoo

Democrats worry despite the brevity of the bill, its language is broad and sweeping, and could be interpreted by the courts to grant deregulation and freedom from oversight to telecommunications providers that already rank at the bottom of customer satisfaction scores. It would also undercut the FCC’s reclassification of broadband from an information service to a telecommunications service, subject to Title II regulations, which gave the FCC increased authority to oversee the broadband industry.

Rep. Anna Eshoo (D-Calif.) has signaled her likely opposition to the Republican bill, noting the proposed law could “eviscerate the FCC’s authority to protect consumers against truth in billing practices and discriminatory data caps; to ensure broadband availability through [the Universal Service Fund] and E-Rate; to address rate-related issues in merger reviews; to ensure enforcement against paid prioritization; and other essential consumer protections.”

Several Democrats on the House Communications Subcommittee are introducing amendments that would likely keep Republican language prohibiting the FCC from directly regulating broadband prices, but also protect the power of the FCC to regulate billing practices, data caps and usage pricing, Net Neutrality, universal service requirements, merger reviews, and discriminatory and/or unfair business practices.

The Democrats are likely to have an uphill battle in a Republican-controlled House. Constituents may have more influence expressing their opposition to H.R. 2666 by reaching out to Rep. Kinzinger and the 18 Republican co-sponsors of the measure:

• Rep. Latta, Robert E. [R-Ohio]
• Rep. Bilirakis, Gus M. [R-Fla.]
• Rep. Barton, Joe [R-Tex.]
• Rep. Lance, Leonard [R-N.J.]
• Rep. Shimkus, John [R-Ill.]
• Rep. Blackburn, Marsha [R-Tenn.]
• Rep. Olson, Pete [R-Tex.]
• Rep. Pompeo, Mike [R-Kan.]
• Rep. Scalise, Steve [R-La.]
• Rep. Cramer, Kevin [R-N.D.]
• Rep. Collins, Chris [R-N.Y.]
• Rep. Long, Billy [R-Mo.]
• Rep. Guthrie, Brett [R-Ky.]
• Rep. Johnson, Bill [R-Ohio]
• Rep. Ellmers, Renee L. [R-N.C.]
• Rep. Walden, Greg [R-Ore.]
• Rep. Upton, Fred [R-Mich.]
• Rep. Allen, Rick W. [R-Ga.]

Wheeler

FCC chairman Thomas Wheeler considers mobile broadband a poor substitute for fixed/wired Internet access. A fact sheet released by Wheeler’s office shows he is convinced America still has a broadband problem — speeds are too slow, competition is lacking, and 4G/LTE wireless broadband is so usage-capped or speed throttled, it is not a serious substitute for traditional wired broadband.

Wheeler claimed, “approximately 34 million Americans still lack access to fixed broadband at the FCC’s benchmark speed of 25Mbps for downloads, 3Mbps for uploads,” and has previously said those that do often find those speeds from only a single provider, typically a cable company.

Wheeler doesn’t dismiss the need for wireless Internet access, but he considers it an add-on for customers on the go. Other highlights from the fact sheet:

• A persistent urban-rural digital divide has left 39 percent of the rural population without access to fixed broadband. By comparison, only 4 percent living in urban areas lack access;
• 41 percent of Tribal Lands residents lack access;
• 41 percent of schools have not met the Commission’s short-term goal of 100Mbps per 1,000 students/staff;
• Only 9 percent of schools have fiber connections capable of meeting the FCC’s long-term goal of 1Gbps per 1,000 students.

Wheeler also said that U.S. broadband continues to lag behind other developed nations, only ranking 16th out of the top 34 countries.

Wheeler thinks wireless broadband is an essential service for many, but it should not be compared with wired broadband, as the two services are distinct from one-another:

• Fixed broadband offers high-speed, high-capacity connections capable of supporting bandwidth-intensive uses, such as streaming video, by multiple users in a household. But fixed broadband can’t provide consumers with the mobile Internet access required to support myriad needs outside the home and while working remotely.
• Mobile devices provide access to the web while on the go, and are especially useful for real-time two-way interactions, mapping applications, and social media. But consumers who rely solely on mobile broadband tend to perform a more limited range of tasks and are significantly more likely to incur additional usage fees or forego use of the Internet.

Overall submarine cable capacity, which supports a substantial amount of international Internet traffic, has grown around 36% per year for 2007-2014 and is expected to grow around 29% for 2014-2016. But traffic planners are confident the traffic growth will be easily accommodated over existing submarine cable circuits.

A new U.S. International Circuit Capacity Report from the International Bureau of the Federal Communications Commission details the total amount of capacity available between the U.S. and any foreign point. That data helps traffic planners maintain suitable Internet traffic capacity before international data traffic jams emerge. The report shows plenty of capacity remains available to handle sustained Internet traffic growth between North America and other countries around the world. Only the Pacific region, encompassing Australia and New Zealand, shows the potential for a future capacity crunch if more cable capacity isn’t introduced in the coming years.

Submarine cables laid more than a decade ago are showing vast capacity improvements, not because new fiber is being laid underwater, but because of developments in submarine cable technology.

“The technology standard has evolved from 280Mbps per pair (TAT-8 cable) in the mid-1980s, to 5Gbps (TPC-5) in the mid-1990s, to 10Gbps in 1998,” says the report. “Since 1998, the 10Gbps fiber pair has been the standard for all new cables. There are plans to deploy 40Gbps or even 100Gbps fiber pairs. Moreover, the use of Wavelength Division Multiplexing (WDM) technology can multiply the capacity from one pair to multiple pairs depending on the wavelength (or color) of the cable.”

One exceptional example comes from the Pacific region, where Internet traffic has exploded. The Southern Cross cable, which connects Australia, New Zealand, Fiji, Hawaii, and the United States, began service in 2000 offering a total capacity of 20Gbps. Those behind the project envisioned that technological advancements would eventually allow the cable to achieve a total of 120Gbps of “fully protected capacity.” They vastly underestimated what ingenuity in data transmission would bring just 16 years later.

Southern Cross engineers are now deploying circuits capable of 40 and 100Gbps technology, bringing Southern Cross cable’s total available capacity to more than 12Tbps (12,000Gbps). Every upgrade was conducted at the cable station with zero new fiber pairs laid in the water. Other undersea cable operators are initiating similar upgrades, providing exponentially greater capacity at a minimal cost.

The report found the most popular destination for U.S. international undersea cables was Colombia, which hosts eight. Japan and the United Kingdom are each reached by seven U.S. cables. Five cables each reach Panama, Brazil, and Venezuela, and Mexico and Australia have four each.

The most aggressive capacity upgrades are scheduled for the Atlantic region, mostly to support increasing traffic from Europe, the Middle East, and especially Africa. The Pacific region, in contrast, has just 13.3% non-activated capacity, possibly demonstrating a need for new cable capacity.