The FCC’s conclusion that broadband is not being reasonably deployed in the U.S., on a national basis, based upon 7 million homes in rural America that would require $23.5 billion in federal subsidies to connect to wireline broadband, is an unreasonable conclusion.  Here is why.

As a part of its National Broadband Plan, the FCC identified 7 million homes without access to wireline broadband service capable of 4 Mbps.  Some of those areas have broadband at lower speeds; all have access to satellite-based broadband. The agency concluded “it is unlikely that private capital will fund infrastructure capable of delivering broadband that meets the [4 Mbps] target” because of the exorbitant cost of reaching those homes. As we heard again last week, some of those areas today receive thousands of dollars annually per line to support the provision of voice service.

To the extent that this report provides momentum to finally fix the long-broken universal service/intercarrier compensation problem, and to remove actual economic barriers to broadband investment, then that is a positive development.  However, to the extent it is used as pretext to justify more investment choking regulation a la the Title II debate, we will have squandered another opportunity to address the real broadband issues in this country.

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