Commerce Dept.: US has already achieved broadband saturation

A report released last week by the US Commerce Dept. congratulates itself and other members of the current administration for enabling the rapid deployment of broadband Internet service, which it now says is available to 92% of the country.

America entered the year 2000 with citizens living in more than 40% of its ZIP codes having no broadband Internet service provider available to them, according to figures released last week by the US National Telecommunications and Information Administration (PDF available here), an agency of the Commerce Dept. At the end of 2006, that figure had declined to 0.4%; and at the end of last year, citing figures from analyst firm SNL Kagan, high-speed cable Internet service was available to 92% of all US households.

"America's consumers are now reaping the rewards of the Administration's pro-investment, deregulatory policies: a vigorous broadband marketplace in which providers using various platforms compete against one another on price, speed, mobility, content, and other service features," reads the NTIA's report. "Currently available data suggest that broadband availability and subscribership have increased dramatically, and that consumers -- including those in rural and remote areas -- have more opportunities than ever to choose the broadband solution (i.e., technology, services, and provider) that best suits their needs and budget."

The 92% figure may have come as a shock to some who only last November were debating whether to grant the Federal Communications Commission the authority to mandate so-called "a la carte" programming availability to some cable subscribers in metropolitan areas. Under existing telecommunications law, the FCC would have the authority to make such mandates if it could be proven that cable service with 36 or more channels was available to 70% or more of US citizens. Most (if not all) high-speed Internet cable service comes to Americans by way of the same CATV service that brings them television.

A dispute over several matters including the validity of the 70% figure compelled the FCC to drop its a la carte program.

Earlier in the report, the NTIA appears that it could be disputing its own figures. "The lack of a single authoritative data set makes it difficult to establish with certainty whether broadband penetration has become ubiquitous, and this Report acknowledges the benefits of better data gathering tools," it reads. "Nevertheless, a survey of data from the FCC and other sources reveals a very clear pattern: broadband services have become dramatically more available and affordable across the country."

The total number of broadband service providers, both large and small, more than tripled in a three-year period according to Commerce Dept. numbers: from 432 at the end of 2003 to 1,397 at the end of 2006.

One reason for this apparent explosion in competition, NTIA believes, is the administration's adherence to what it calls "pro-technology policies." Among these is the principle that government does best when it does the least.

"Experience teaches that when government tries to substitute its judgment for that of the free market, or otherwise anticipate consumer demand by favoring one product or vendor over another," the NTIA writes, "it can easily distort the marketplace, resulting in the diversion of investment and/or discouraging the research and innovation necessary to bring new and better products or services to market.

"In a rapidly evolving area such as information and communication unintended effects can carry fundamental, long-term adverse consequences that extend across multiple sectors of the economy," the report continues. "Accordingly, especially in the area of ICT, the government should exercise care not to dictate standards, but instead should seek to foster an environment in which the potential of competitive forces can be fully realized to maximize the choices (e.g., technologies, products, services, applications, providers) available to consumers. For this reason, the Administration has consistently and strenuously advocated for technology neutrality in order to remove the government from what are more appropriately marketplace decisions."

The report does note a significant drop-off in the rate of fiberoptic service deployment among cable operators from 2003 to 2006, with public utilities appearing to take up the slack. Of course, those "utility" companies include AT&T and Verizon, whose U-verse and FiOS services, respectively, are championing the deployment of fiberoptic broadband nationwide -- NTIA acknowledged FiOS' throughput speed in some metropolitan areas as approaching 50 Mbps. But NTIA is predicting that CATV services will start moving back into the fiberoptic ballgame, rolling out new fiberoptic lines in 2010 at rates approaching their 2003 peaks.

"From 1996 through 2006, according to NCTA, cable companies spent more than $117 billion in capital expenditures to develop their broadband networks," reads the NTIA report. "The industry reports that it has invested $23 billion in the last two years alone to enhance and improve its advanced, interactive, hybrid-fiber coaxial network. During 2007, cable operators were expected to spend another $13.7 billion on infrastructure -- a 10 percent increase over 2006 -- continuing an upward trend."