According the FCC’s Eighth Broadband Progress Report, 98% of Americans now have access to broadband that meets 4 Mbps down (into the home) and 1 Mbps up (into the Internet). This infers that 2% do not have such coverage, which represents over 5,000,000 people. Not surprisingly, the remaining 2% are scattered over a third of the country’s landmass. While the new rules covering the Universal Service Fund (USF) and InterCarrier Compensation (ICC) have need adopted by the FCC and those monies are intended to support the expansion of broadband to uncovered or underserved areas, the amount required to address the remaining 2% is prohibitive.

Furthermore, the USF/ICC Transformation Order has caused carriers some consternation, as they do not know the level of subsidy that will become available, where the FCC wants to drive continued investment and what the new rules impact will be on existing revenues. All carriers see the future as requiring an adjustment to their business plans to overcome loss of revenue and develop new revenue streams. The USF/ICC Transformation Order has been beneficial in correcting some disparities in contribution by the carriers but it has not been able to drive investment in broadband expansion. This will be clearer when the FCC releases the next set of rules and benchmarks.

An unexpected result of the new USF/ICC Order has been a dramatic increase in the number of failed phone calls. This requires the FCC to establish minimum performance requirements in addition to the expected benchmarks to reduce latency, blocked calls and post dial delay. Obviously, improving access without commensurate quality and performance defeats is an incongruity that is not acceptable.

Finally, much of the report continues to deliver a message of availability with significant room for improved penetration.  Having recently upgraded my home broadband connection to support video conferencing via Skype, I learned how much that level of access affects your overall phone bill.  Given the current economic times, it is difficult for families to afford such an increase in their monthly bills. For those of you new to this blog, the US has the second highest per megabit pricing of the G8 countries (France, United States, United Kingdom, Russia, Germany, Japan, Italy, and Canada) with only Canada more expensive which may be why we still have the poorest broadband penetration of the G8.

The FCC needs to add that third measurement of price to its broadband report covering access and speed.

See you on Monday!