General

This week the FCC allowed parties to release some aggregate data in the broadband market collected as part of the ongoing special access proceeding.  And this data, even though partial, confirms what I and others have been saying all along: virtually all businesses have access to real, facilities-based competition today. And to the degree that some individual businesses don’t have that access today, it’s because the current beneficiaries of special access regulation have an incentive not to invest to connect their business customers to the closest competitive fiber networks that are readily available in the market.

In all, 95% of Census blocks where demand for special access exists have competitive facilities available.  And those Census blocks include 99% of all businesses in the country.

With grades like these, let’s give an A+ to the competitive providers that are bringing modern fiber to American businesses.  This definitely includes cable companies that are rapidly expanding their services to businesses of all sizes.

On the other hand, it’s clear from the data that the CLECs have customers in many office buildings that must continue to rely on antiquated copper facilities and their slow data speeds because their CLEC provider refuses to build out fiber connections to nearby fiber networks.  Apparently, it’s easier to call for FCC action than it is to build out networks even 1000 feet to compete with the competitive carriers.

As US Telecom notes, the calls for more FCC intervention are “a matter of convenience, not competition.”  But a business strategy of rent-seeking-rather-than-investing is not evidence of market failure.  It’s evidence instead of regulatory failure.  Because so long as the FCC’s special access policies serve to protect the business models of CLECs, who decline to invest, then why invest?  Why spend shareholders’ or investors’ money when the government forces others to subsidize you?  Nice work if you can get it, but it does nothing to promote innovation or, for that matter, competition.  Government-enabled competition isn’t really competition.

But now that at long last we have some data publicly available, the right policy is even more clear:  There’s simply no reason for the FCC to intervene in this market even more than it already has.  The decision by some companies not to invest in the future should not be a basis for increased regulation.