News - April 27, 2020

INCOMPAS Files ‘Communications Marketplace Report’ Comments with FCC

Highlights Threats to Broadband Competition and the Streaming Revolution

WASHINGTON, D.C. (April 27, 2020) – INCOMPAS, the internet and competitive networks association, is urging the Federal Communications Commission to adopt a stronger approach to encouraging competition across all markets.

Filing comments today in response to the FCC’s second “Communications Marketplace Report” proceeding, INCOMPAS warns that competition is significantly lacking in the broadband wired services heavily relied on by families and small businesses who need faster, more affordable options.

The INCOMPAS filing underscores the need for accurate maps and data, details antitrust threats in the video and streaming marketplace, and offers a strong warning against efforts to end the bipartisan competition laws that enable the Bridge 2 Broadband for new fiber builders and 5G deployments.   

“Broadband maps are broken and in too many places speeds are slow, prices are high and consumers are fed up with terrible customer service,” said Chip Pickering, CEO of INCOMPAS. “More competition is the answer, and it’s time for the FCC to launch a competition crusade based on gigabit speed goals that create jobs and new opportunities for small business growth.”

INCOMPAS highlights the success and benefits of internet edge and streaming growth, but warns of anticompetitive practices by vertically integrated players who have used broadband monopoly power to dictate price for streaming and video services. The INCOMPAS filing states: “Federal antitrust authorities should be investigating these practices and how they can further skew the marketplace to favor the large, vertically integrated BIAS providers and disadvantage the online content (edge providers) and smaller BIAS providers that they may compete with, as well as competitive MVPDs.”

The INCOMPAS filing can be found HERE, and covers a number of areas impacted by competition including:

• Data/Maps: INCOMPAS points out the FCC’s own admission that Form 477 data is flawed and cannot rely on it for competition analysis.
   
• Speeds: INCOMPAS wants the FCC to abandon current slow speed, (25/3 Mbps) broadband definition, which is minimally adequate, and look to the future by insisting on giving all Americans a Gigabit speed (1000/500 Mbps) benchmark. 
   
• Residential Broadband: Even the current (flawed) data illustrates a lack of competition at or above 100 Mbps download and 10 Mbps upload: 31% of developed census blocks lack any provider, another 44% of developed census blocks have only one such provider, and only 5% of census block had three or more providers advertising service somewhere in the block.
   
• Business Data Service: INCOMPAS details massive price hikes that have hit business broadband customers since the FCC’s BDS order – price hikes as high as 221%! A monopoly tax on small businesses, as 77% of locations with business data services demand had only ONE full facilities-based provider available at their location. And it’s worse (81%) for Gigabit speed locations.
   
• Wireless/Mobile: INCOMPAS stressed the need to measure mobile competition separately from fixed services – as they are complimentary and not a substitute.
   
• Net Neutrality/Interconnection: INCOMPAS says the streaming revolution and “cord cutting” has driven the marketplace to build new, stronger, faster networks. It warns that absent net neutrality protections, dominant broadband providers will charge interconnection fees that slow down streaming growth. INCOMPAS points out that seventy-six percent of the residential last mile BIAS marketplace is only served by four companies - Comcast, AT&T, Charter (Spectrum), and Verizon – and notes those companies do not even compete head-to-head in the marketplace.  
   
• Antitrust Warning: INCOMPAS states that vertical integration has created dominant players that control both content and distribution, including Comcast/NBC Universal and AT&T/CNN/HBO which has withheld content to discriminate against their competitor DISH/Sling even though they promised regulators they would not do so.
   
• Streaming: Consumers are flocking to new streaming content that provides more choice, more content and lower prices. 44 percent of customers that switch from a traditional pay-TV service move to over-the-top services. By the end of 2019, online video subscribers had increased to 9.96 million from 7.52 million at the end of 2018, despite the fact that several providers were forced to raise prices to meet increased costs for channels and content. However, INCOMPAS warns new fees and attempts to apply non-related service taxes present a risk to streaming growth.
   
• 5G Deployment: INCOMPAS stressed that real 5G deployment requires both wireless upgrades and a dense fiber backbone to support small cells. Yet fiber builders are seeing barriers to deployment, including pole attachment delays and duplicative fees and taxes at the local level.
   
• Bridge 2 Broadband: The FCC proceeding to end bipartisan competition laws will punish small, local broadband builders who deploy fiber for wired broadband serving residential and business customers and 5G. Cutting off the Bridge 2 Broadband is a threat to both urban and rural communities.
   
• Condos and Apartment Competition: INCOMPAS is urging the FCC to finish the job, and act on MTE reforms that will bring more broadband competition to the 30% of Americans living in condo complexes and apartment buildings – many of which are locked into monopoly contracts as a result of landlords’ sweetheart deals.