The American industry lobby (AT&T, Verizon, and Comcast) successfully pushed the regulator to get rid of net neutrality, but they are not stopping there.

They can sense the opportunity under the Trump Administration to roll further back any regulations that stand in the way of maximising their profits. As all three largely enjoy geographic monopolies in their regions of operation, there is little competition driving innovation forward, so their aim is to milk the networks that they currently have in place for as long as possible.

The ability for them to do so goes back to 1996 when the FCC declared that broadband was not a telecoms service and that telecoms regulations, therefore, did not apply (e.g., providing retail access to independent ISPs). In order to limit their misuse of their dominant positions the FCC, under the Obama Administration, introduced net neutrality; however this has now been scrapped under the Trump Administration. For more information on net neutrality see my last analysis on this topic.

Next on the FCC’s agenda is the downgrading of the definition of broadband. At the moment this stands at 25MB/s download and 4 MB/s upload. The incumbents are lobbying to bring that down to 10MB/s and 1 Mb/s.

Then they could claim that they have fulfilled their broadband obligations since most of the landlines are already able to deliver those speeds, so they would not need to upgrade these networks any further, they would then use their mobile networks for higher-speed services. This would significantly increase the costs to those users who need daily broadband services for family use, entertainment, etc. (typically 25Mb/s+).

Areas that are unable to get such landline-based services are increasingly being forced off the landline network and offered a mobile service instead. As is the case in most countries, in the United States broadband is more expensive when used over mobile networks, especially if one has to use the mobile connection as the only option for all their broadband requirements (e.g., Netflix, etc.)

Another change that is being rumoured is the downgrading of the school broadband service (E-Rate). So far this service has successfully connected 90% of the schools in the USA, but constant updates and upgrades of this service are needed, and this is where it looks like the FCC will start cutting its funding.

Initially, the FCC agreed with the industry suggestions to downgrade the broadband requirements. However, fortunately, there was a pushback last week with the FCC—be it reluctantly—stating that mobile broadband is not an alternative to fixed broadband and that they will not downgrade the current regulated broadband speed.

Having said all of this, the number of people with low-level broadband requirements will find mobile broadband a great alternative as long as their broadband usage remains low to moderate. This market is estimated to grow between 15-30% of the overall fixed broadband market.