FCC: Lower the price, and millions more will have broadband

Reducing the cost of broadband is the key challenge to extending high-speed Internet access to the approximately 93 million Americans using dial-up service or without any home connection to the Web.

A report issued Tuesday by the Federal Communications Commission (FCC) found that 36 percent of Americans without broadband say price – such as service fees and or the cost of a computer – is the primary barrier to broadband.

The report on Americans' Internet habits comes several weeks before the FCC is due to present its National Broadband Plan to Congress. That plan will recommend a blueprint for extending fast Internet service to underserved areas and to households without high-speed connections.

“By 2020, the US should have affordable, 100-megabit broadband to 100 million American households,” FCC Chairman Julius Genachowski said Tuesday at a press conference to announce the report, "Broadband Adoption and Use in America." “Broadband is indispensable infrastructure for the 21st century. It’s already becoming the foundation of our economy and our democracy.”

Most Americans use the Internet

The report also found that:

• 78 percent of adults are Internet users.
• 67 percent of US households have a high-speed Internet connection.
• 59 percent of African-Americans have broadband at home.
• 49 percent of Hispanics have high-speed Internet access.
• Americans pay an average of $41 a month for broadband.

But the primary question is how the FCC intends to reduce broadband prices – and lower the barrier to broadband – while extending services.

While the cable and telecommunications industry largely agrees that price is a factor in keeping many Americans offline, most Internet providers have lobbied hard against increased government regulation as a way to ensure Internet affordability.

But many consumer advocates have urged the FCC to take a much more active role in regulating Internet providers.

Both sides of the debate are anxiously awaiting a federal appeals court decision that could determine what legal authority the FCC has to regulate Internet providers. The case originated with an FCC ruling that Comcast violated “net neutrality,” the principle that Internet providers should not discriminate against sites based on content, by blocking a particular website. Comcast argued that the FCC doesn’t have any jurisdiction to enforce net neutrality.

Industry groups resist regulation

In a letter sent Monday to the FCC, telecom groups urged the FCC not to pursue tougher regulations.

Doing so, they wrote, would “inflict burdensome obligations not just on those providers, but on a wide variety of other Internet-based companies” and would be “at odds with the Commission’s historical commitment to keeping the Internet unregulated.”

But advocacy groups such as Public Knowledge see things differently.

“The best cure for high prices is vigorous competition. The FCC should make certain that it includes as part of its National Broadband Plan provisions to create the competition that will bring down prices and produce better services for all Americans,” the group said in a statement.

Darrell West, director of governance studies at the Brookings Institution, says the FCC hasn’t tipped its hand regarding what type of policy idea it will pursue to reduce broadband prices. But he said the FCC has suggested it could try to tap the Universal Service Fund, an $8 billion fund to expand telephone service to rural areas.

Mr. West says about 98 percent of American households now have telephone service. Now, he says, “the question is whether you want to declare victory and use that money for some related purposes.”