Engine Broadband Deep Dive: Policies to Promote Broadband Competition


We all know how it feels to have a terrible internet connection, or worse, no connection at all. We’ve experienced the intense frustration of “no service.” The agony of waiting for a video to buffer or a web page to load. The disappointment of paying an outrageous sum for crappy service.

In September—the same week that President’s Broadband Opportunity Council (“the Council”) published a report that included 36 actions that federal agencies will take to better facilitate broadband deployment across the nation—Akamai published its “State of the Internet” report, ranking the U.S. 20th worldwide in terms of broadband connectivity.

While the proximity in timing is pure coincidence, the release of Akamai’s report highlights why it is so important that the government take steps to expand broadband access. The U.S. has a broadband problem. Everywhere you look there is a new data point highlighting deficiencies in the market. Almost 55 million Americans still lack access to advanced broadband and more than 25% of American households do not subscribe to broadband at home.

Beyond this lack of access, there is also a lack of competition.  As the Council notes in their report, “nearly 40% of American households either do not have the option of purchasing a wired 10 Mbps connection or they must buy it from a single provider.” The state of competition in the mobile market is similarly disappointing, with just two dominant wireless companies controlling nearly 75% of the low-band spectrum in the country—the type of spectrum most valuable for mobile Internet use.

This is problematic, since competition is what makes access more meaningful. Competition brings lower prices, higher speeds, and more incentives for companies to build out better networks. Startups depend on this sort of a healthy and competitive broadband market. We’ve elaborated on why competition matters to startups in previous posts, but in short, improved access and competition mean more customers, lower operating costs, and an enhanced ecosystem for innovation.

So what can government actually do to solve this problem?

The Council’s September report and resulting cost-neutral actions represent a step in the right direction. For example, a number of agencies plan to expand existing program support to cover broadband projects, allowing for increased funding for entities building out broadband in un- or under-served areas. Additionally, the report recommends extending the Department of Transportation’s “dig-once” policy to other agencies’ infrastructure projects. Dig-once policies encourage the laying of one tube, through which any provider can later route their fiber or cables. The Federal Highway Administration has reported that these policies can reduce broadband deployment costs by as much as 90%.

However, there is still more that Congress, the FCC (which was not included in the Council because of its status as an independent agency), and specific states or localities can be doing to improve the broadband ecosystem.

Over the next few weeks, we will be highlighting a number of policy actions that could be taken to improve competition in the broadband market and better encourage entrepreneurial activity. We will look at everything from special access services to federal spectrum to municipal broadband and much more, so stay tuned!