broadbandEven as some urban Internet service providers are boosting high speed access speeds to a gigabit, while many competitors are raising speeds to 50 Mbps to 100 Mbps, rural ISPs might face a similar challenge in the near future, if not to the same degree.

If the Federal Communications Commission gets its way, “high speed access” might be defined as a minimum of between 10 Mbps to 25 Mbps. That change would not be the first. A few might remember that the traditional definition of broadband was any speed of 1.5 Mbps or faster.

The current definition is a minimum of 4 Mbps in the downstream direction with 1 Mbps in the upstream.

CAF Speed Target
The definitions matter for any number of reasons, not least of all that universal access funding, which now has shifted from voice services to Internet access services as part of the Connect America Fund, will use the FCC’s definition.

Recipients of CAF funding would have to build access networks operating at the higher minimum speeds.

There might also be a bit of a hiccup in the “data comparability” area as well, since it is likely U.S. access speeds might take a temporary dip, since some connections that might qualify at a minimum of 4 Mbps might not quality at 25 Mbps, for example, should that be set as the standard.

A 10-Mbps definition would be less disruptive, but still would have some negative impact on the number, and therefore the percentage, of U.S. homes with “broadband” access.

The definition matters because universal service support and other data collection efforts hinge on use of the definition.

The biggest impact arguably would be felt in rural areas, since most urban and suburban networks already offer standard speeds of 10 Mbps or faster. In 2012, a study by the Organization for Economic Cooperation and Development already reported the average (mean) U.S. high speed access was about 47 Mbps, with a median (half faster, half slower) of about 17 Mbps.

A separate study by the U.S. Federal Communications Commission found 89 percent of U.S. households in 2012 could buy services operating at a minimum of 10 Mbps. About 64 percent of U.S. households could buy service at 25 Mbps.

About 27 percent of locations already, in 2012, could buy service operating as fast as 100 Mbps.

High Speed Broadband Services
Source: FCC

U.S. cable operators, on the other hand, reported in 2012 that 82 percent of U.S. households served by cable networks could buy service at 100 Mbps or faster.

None of those figures indicates consumers buy service at such rates, only that they can buy the services. But that is the point: they could buy.

Winners and Losers?
A revision of the minimum definition upwards from 4 Mbps to 10 Mbps would directly affect the availability of “high speed access” in  rural areas, since most urban and suburban areas already likely have access, provided by at least the cable company, far in excess of 10 Mbps.

At the time of the FCC report, about six percent of U.S. residents could not buy high speed access operating at 4 Mbps. That percentage would probably grow, in the near term, if the definition were raised to 10 Mbps, and even more should the definition be raised higher.

FCC Chairman Tom Wheeler says 25 Mbps is “table stakes,” while universal service should be based on a definition of at least 10 Mbps for Universal Service Fund activities.

In other words, the FCC chairman thinks classic “Ethernet” speeds of 10 Mbps should now be the minimum any Internet service provider must provide, in a rural area, to qualify for universal service support.

That has clear financial implications for at least some rural ISPs, some of which might have had difficulty meeting the 4 Mbps standard, even with CAF support, and who would find that task even more difficult if the target were raised to 10 Mbps.

Fixed wireless competitors, meanwhile, will, over time, need to adjust to the fact that some key competitors will be more capable in that regard, since boosting fixed wireless speeds, without new spectrum access, will be demanding.

The point is that no competitors will be immune from possible changes in competitive fortunes as speeds continue to advance. There will eventually be winners and losers, based on ability to upgrade.

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