ABSTRACT
This article reviews available public data on the pre-COVID (2014–2018) residential broadband markets in the United States, and presents six data-driven stylized economic facts about these markets. Broadband was a significant household expenditure. There were very limited numbers of competing residential broadband Internet service providers (ISPs) in most local markets. Service prices have not decreased much over time. Quality competition seems quite important. There was very limited entry by new ISPs. Technological innovation in wireless drove much observed new entry.
In this article, we1 analyze a large, rich, and complex dataset to derive a set of data-driven “stylized facts”2 about US residential broadband markets prior to the COVID pandemic of 2019. Documenting these facts is important: it currently seems quite possible that structural changes in economic and social activities triggered by COVID may have persistent effects on broadband demand and supply after the challenges posed by the pandemic have disappeared. Additionally, the relationship between market structure, prices, and service quality has been a focus of interest to the US Congress, including the recent example of passage of the Broadband Data Act. Our goal is to better understand recent industry dynamics so new data-driven policies addressing improved broadband availability and service quality can be designed.
These facts highlight a potential divergence in the effects of local market structure on residential broadband service price and quality. Available data suggest, first, that nominal prices for residential broadband service plans in the United States have basically been flat, on average—unchanged over the last decade. The major dimension for competition among major broadband internet service providers (ISPs) seems to be improved service quality, particularly upgrades to download speeds. Second, within a relatively short time window, we document evidence of substantial entry and exit by firms within spatially disaggregated local markets. Third, both technological innovation and regulatory policy changes may have significantly lowered the costs of quality improvements; we observe substantial variation in quality within a cross-section of spatial locations over time.
Consumer gains due to broadband quality improvements are potentially very large.3 Internet access has become an essential resource for much of the US population. While in 2000 only 52% of US adults acknowledged that they were Internet users, around 90% now do so (Pew Research Center, 2019). Smartphones, music, video, TV streaming services, and online news sources are now integrated into the rhythm of daily life. For example, Netflix subscribers on average spend more than one hour per day streaming that one source of content (Meadows, 2019). The proportion of US adults who own a smartphone has increased rapidly from 35% in 2012 to 81% in 2018 (Pew Research Center, 2019). These trends in the United States are similar across groups with different income, education, and ethnicities, and are mirrored in other countries around our world. For these reasons, improvements in Internet service quality have the potential to bring large impacts on household welfare: most people now use the Internet, and they use it intensively.4 Using Federal Communications Commission (FCC) data, we analyze a rich panel dataset that covers all broadband services delivered to households by ISP, technology and maximum download speed for each of approximately six million populated US census blocks between December 2014 and December 2018. We describe trends in market structure, quality, and technology utilization within this five-year period.
The remainder of the article is organized as follows. Section I describes related literature; section II describes data sources and how we built our analytical dataset; section III provides background and analysis supporting six stylized facts about the US residential broadband Internet service industry; and section IV presents conclusions.5
Literature Review
The FCC has produced voluminous reports on the residential broadband industry. For instance, every year, the FCC releases the Measuring Fixed Broadband Report that analyzes the performance and quality of residential broadband service. Another example is the Broadband Deployment Report, assessing penetration of high-speed broadband connections among US households. A broader analysis of the telecommunications industry is performed by the FCC every two years, and released as the Communications Marketplace Report. In these reports, the FCC assesses the state of competition in the broader communication industry.6 In all these reports, the FCC has generally described steady progress in terms of increased broadband availability, affordability, and competition. In the 2020 Broadband Deployment Report, the FCC states “Available evidence demonstrates that the digital divide continues to narrow as more Americans than ever before have access to high-speed broadband.”7 Unfortunately, these FCC reports do not generally summarize the data in a consistent way from year to year, while data are sometimes retrospectively revised in significant ways, and the underlying data is not always available to replicate particular analyses.
There is an extensive literature on the US broadband industry. Previous work includes studies of service availability, broadband policy effectiveness, and the relation between competition, market structure, and quality. On geographic service availability, Gadiraju et al. (2018) study the deployment of broadband in the United States during the period 2014 and 2016. They use Form 477 census tract data from the FCC to describe service availability and speed, and how they are related to demographic characteristics. Their main finding is that around ¾ of households have access to two or more Internet providers. Beede (2014) describes broadband service availability in December 2013 across the United States. A novelty is that raw data (restricted and nonpublic) from the FCC's Form 477 (at the census tract level) is used in the analysis, so it provides a unique overview of the whole industry. One main finding was that 98% of the population had a choice of at least two ISPS with speed of 3 Mbps or higher. Additionally, 37% of the population had a choice of at least two providers at speeds of 25 Mbps or greater, but only 9% had three or more choices.
Neither of those papers considers the evolution of the market, limiting their analysis to the market state at a given point of time. One of the goals of this article is to measure changes in market structure and concentration, as well as broadband quality outcomes, over the period from 2014 to 2018. Furthermore, one of the principal conclusions of another previous study8 is that census tract level data significantly overstate the number of broadband providers from which an individual residential household in that census tract may be able to purchase service. That is why we construct our analysis at the census block level.
Several papers have studied the effects of policies that seek to promote broadband penetration in underserved areas. The focus of these papers is policy impact on broadband penetration and its effects on other industries. Boik (2017) uses household-level cable and satellite broadband subscription data from North Carolina to estimate how many currently unserved regions warrant an entry subsidy. He finds that the cost of connecting the 5% least dense areas of North Carolina is equivalent to $1519 per household per month. Bai et al. (2020) study the effect of the Broadband Initiative Program (BIP) in the agricultural sector. They find that BIP funding had a small but short-term impact on per capita farm sales, but the effect is mainly through a regional spillover rather than a direct effect. Whitacre and Gallardo (2020) assess the impacts of state policies on total and rural broadband availability in the United States. Their results suggest that state-level funding programs have had a meaningful impact on broadband availability.9 Another example is Rosston and Wallsten (2020) who evaluate a low-income broadband program that Comcast implemented after the Comcast-NBCUniversal merger. They find that broadband adoption increased at a higher rate in areas served by Comcast compared with areas not served by Comcast.
This article is also related to a previous literature that studies competition and market structure in the broadband service industry, and its possible effects on quality. Previous papers have found a positive relationship between market structure and download speeds. Wilson (2019) finds that in competitive markets higher download speeds are provided compared to monopoly markets.10 Reed and Watts (2018) show that access to high-speed Internet increases as the number of providers increases in a county. Prieger et al.'s (2015) study how broadband firms respond to the entry and quality decisions of their rivals. Estimating a discrete choice game of entry and quality, their preliminary results show that firms actually respond to quality choices of rival broadband providers, and firms' responses are heterogeneous with respect to type of provider and quality. Wallsten and Mallahan (2010) is one of the few papers that analyzes the effect of market structure on prices. Using nonpublic versions of older FCC data, they find a strong correlation of number of providers with housing density, penetration with income, and show how different wireline technologies are more or less prevalent in areas with differing housing density. A key result is that lower prices, attributed to competition, are observed in markets with three providers, compared to markets with just two providers. Molnar and Savage (2017) use field measures of download speed to analyze the effect of entry and market structure on product quality. Their results show that wireline speeds tend to be higher in markets with two or more wireline providers than with a single wireline provider. An important limitation in their analysis is their very limited sample of households. For instance, in many of their markets (defined as census block groups), they use an observed speed measurement derived from only a single volunteer household's purchase of Internet services, and their data is available only in a single period.
Some recent evidence suggests that the positive effect of market structure on download speeds is conditional on technology used by incumbent and entrant ISPs. Kotrous and Bailey (2021) find that the entry of a new fiber ISP does not explain observed increases in cable and digital subscriber line (DSL) download speeds. In the same vein, Flamm and Varas (2020) find a meaningful effect of new entry by a “legacy” cable or DSL ISP on service speeds, but they find no statistically significant effect from new fixed wireless or fiber ISPs.
A key element in any analysis of competition is market definition. Equilibrium outcomes, such as number of firms in each market or quality, may vary greatly depending on how markets are defined. Previous papers have used widely varying spatial definitions of fixed broadband service markets, driven primarily by the data availability. For instance, Reed and Watts (2017) use counties as markets; Flamm (2015), Xiao and Orazem (2011), and Grubesic and Murray (2004) use zip codes as markets; Molnar and Savage (2017) use census block groups; and Wallsten and Mallahan (2013), Prieger et al. (2015), and Denni and Gruber (2007) use census tracts. Certainly (and particularly for wireline networks), it seems clear that there is zero substitution possible on the demand side between broadband services providers whose networks pass a particular block, and service providers whose networks do not reach that particular block, even if both blocks lie in the same census tract or block group. That is why we use census blocks to define local markets. Although the FCC has acknowledged that Form 477 data overstates broadband providers available in some location at the census block level (FCC, 2020), we believe this problem is likely to be much less severe in urban census blocks, compared with rural census blocks. In urban areas, a census block is generally a physical city block, so for a wired ISP already offering service in an urban block, it would generally be relatively inexpensive to offer service to other households on the same block.11
Data Sources
The primary data source for this analysis is the Fixed Broadband Deployment Data collected by the FCC through its Form 477. All facilities-based fixed broadband service providers are required to report a variety of data for census blocks in which they offer Internet access service at speeds over 200 kbps in at least one direction (i.e., download or upload).12 The ISPs reporting service offers to a block are not required to actually serve any customers in the reported census block—creating a hypothetical “could” aspect in the offer of service that sometimes appears to create data issues, particularly for wireless service providers who in theory can provide service within a fixed line-of-sight radius of stationary wireless antennas. Such “phantom” wireless ISPs may not in practice actually market their service within all line-of-sight areas reported to the FCC as offered service.13
The Fixed Broadband Deployment Data is published twice per year (June and December). For each census block, broadband service providers are identified by their “Holding Company” (HOCO) name. For each technology deployed by a provider in that census block, the data contains the maximum advertised download and upload speed, and whether that service is sold to households or business.14 Technologies identified include various flavors of cable Digital Over Cable Service Interface Specification (DOCSIS) standards, various flavors of DSL, other wireline, fiber, satellite, and terrestrial fixed wireless. In its current format (at the census block level), this data is available from December 2014 to December 2018. Within that period all variables are comparable across years. We have reclassified all flavors of wireline DOCSIS networks as “cable,” and all flavors of wireline DSL networks as “DSL.”
Data Processing Details
From the FCC-fixed deployment data, we extracted information relevant to residential consumer service provision. We also dropped observations on satellite broadband service providers, for two reasons: first, the Form 477 service data from these ISPs lacks granularity, and is provided to the FCC at the state level.15 Second, the satellite data does not reflect either active local marketing efforts at the individual census block level, or capacity constraints that may limit satellite service availability in particular local markets.16
For each census block, we calculate the maximum advertised upload and download speeds offered by any provider using either a fixed wireless technology or a wireline technology (or both, when a mix of technology sets is utilized by the provider).17 For each time period, we then calculate three measures of market structure at the census block level that were previously described: (i) number of providers using legacy (cable and DSL, other copper) wireline technologies in serving a block, (ii) number of providers using fiber but not legacy technology, and (iii) number of providers using wireless but not fiber or legacy technology. The total number of broadband providers is simply the sum of these three numbers.18
Based on this classification of service provider technology, we identify the largest single subpopulation of US census block markets: so-called classic legacy (cable/DSL) duopolies, duopoly blocks in which there were precisely two terrestrial “legacy” providers in December 2014—ISPs which made use of cable, or DSL, or both technologies in offering service. In urban areas, almost 60% of urban census blocks had two or fewer providers in 2014: about 2/3 of this group of census blocks were “legacy duopolies” by this definition.
We classify blocks in this manner in order to better accommodate the institutional diversity of broadband service in US block level, micro markets. In many local markets (e.g., in Texas), analysis of the detailed FCC data suggested that new entrants often consisted of small and often regionally based firms deploying fixed wireless technology to offer lower quality/speed service at a discount from the price points used by the incumbent legacy duopolists.
The “pure” fixed wireless and fiber providers entering into local, residential block markets in recent years may potentially have had a disruptive impact on market outcomes in blocks that previously were relatively stable legacy wireline duopolies. This classification of census blocks accommodates inquiries into how entry may affect service quality in the most dominant (and relatively homogeneous) single category of competitive structures within a complex national ecosystem of locally defined markets, the “legacy duopoly.”
Data Panel
Our analytical dataset is a panel dataset where the basic unit is the census block/time period observation. Service availability records at the provider/census block/time period level have been aggregated into block-level counts of ISPs, and block-level maximum available download and upload speeds. The panel we utilized has five periods: December 2014, December 2015, December 2016, December 2017, and December 2018. Our dataset contains approximately 67 million observations and contains information for approximately 6 million US census blocks, in 3,142 US counties, with over 2,000 different broadband providers.
Six Stylized Facts About US Residential Broadband Service
We seek to establish some simple, stylized facts about US residential broadband service. The goal of this narrative is to establish that broadband is an important and significant expenditure for most US households in the wired America of the 21st century, that historically there has been limited competition in the provision of fixed broadband service to US households, that nominal service prices have been relatively flat, that competition has primarily taken the form of improved quality (in the form of download speeds), and finally, that recent technological improvements in fixed wireless broadband service appear to be associated with recently observed changes in competitive outcomes in US residential broadband service markets.
Broadband service is a significant expenditure for US households.
The weighted average (by numbers of households choosing different service speed tiers) monthly standalone broadband service plan price in US urban areas was estimated by the FCC to be $61.65 in 2017.19 This monthly price tag varied across speed tiers, averaging $47.08 for .2 to 10 Mbps download speeds, $52.29 in the 10 to 25 Mbps tier, $61.78 for 25 to 100 Mbps, and $104 for speeds at or above 100 Mbps. At these prices, broadband service represents a significant expenditure for low- and medium-income households. By most measures, US broadband prices are relatively costly in comparison to other countries.20 The data in the FCC report support the authors' experiential observation that “low-end” broadband service plans available in most US cities run about $40 to $50/month and have not varied greatly in nominal price in recent years.
In the majority of US markets, there has been limited competition in provision of residential broadband services.
Figure 1 shows quantile plots for numbers of terrestrial (i.e., excluding satellite) broadband ISPs serving populated urban and rural census blocks in December 2014 and 2018. In 2014, 59% of US urban census blocks and 82% of rural census blocks, had two or fewer fixed terrestrial broadband providers offered residential service to households. By December 2018, the share of duopoly and monopoly census blocks in the distribution of numbers of competing providers across census blocks had declined only very slightly—to about 56% in urban areas and to 75% in rural areas—and this was still an extraordinarily high share. Broadband service markets saw some limited new entry over the 2014 to 2018 period, but effectively remained a duopoly or monopoly in the majority of US census blocks.21
FIGURE 1
Quantile Plots of Broadband ISPs/block for US Census Blocks, December 2014–18.
Interestingly, 2017 appears to have been a high watermark for competition in US residential broadband service markets. From 2017 to 2018, the number of duopoly and monopoly census blocks actually increased. Mean number of providers per census block declined from 2017 to 2018 (see Table 1).
Broadband service plan prices have been flat in most US markets.
Prices for broadband service as portrayed in official price indexes look more like the price of cheese than the price of chips (the silicon kind). The Bureau of Labor Statistics (BLS) collects and publishes data on fixed Internet service prices in its consumer (CPI) and producer (PPI) price indexes (see Figure 2). Until 2017, for the most part, these indexes appear to behave like conventional matched model price indexes,22 covering some fixed bundle of low- and high-end service plans. Changes in plan quality (like speed upgrades) in low- and high-end plans do not generally appear to have been systematically reflected in adjustments to these price indexes.23
FIGURE 2
Trends in US CPI and PPI for Internet Services.
Source: Authors' calculations from official BLS price indexes, rebased to June 2004=100. The large declines in these price indexes in summer 1999 and summer 2006 appear to have been related to the AOL-Compuserv merger in 1999, and the shift of AOL to a free service model in 2006. See Greenstein and McDevitt,24 for details.
FIGURE 2Close modalTrends in US CPI and PPI for Internet Services.
Source: Authors' calculations from official BLS price indexes, rebased to June 2004=100. The large declines in these price indexes in summer 1999 and summer 2006 appear to have been related to the AOL-Compuserv merger in 1999, and the shift of AOL to a free service model in 2006. See Greenstein and McDevitt,24 for details.
The new hedonically adjusted PPI has only a brief history, but even with the BLS' hedonic price methodology, quality-adjusted Internet service prices have not declined very much over the last couple of years. From December 2016 to December 2017, the newly quality-adjusted PPI for wireline Internet services fell at a respectable annual rate of −3.9%. From December 2017 to December 2018, however, the annual decline rate for quality-adjusted broadband service price was a paltry −.32%. Generally, the PPI appears to have been declining at a modest rate since 2017. In contrast, the retail CPI appears to have been pretty flat since 2017, with the consequence the ratio of the CPI to PPI has notably increased since 2017 (see Figure 2). Flamm and Herrera25 construct a hedonic price index from a small national sample of US broadband plan prices and find quality-adjusted price declines in the low single digits.26
The ratio of retail to wholesale prices is arguably a metric related to residential broadband ISP profit margins, since the CPI tracks retail residential ISP prices, and the PPI is intended to track the price of purchasing Internet services at the wholesale level, and therefore would be a determinant of residential ISP service costs. The temporal coincidence between a decline in residential ISP competition after 2017, and the increase in the ratio of residential ISP price indexes to the Internet service PPI after 2017 (suggestive of an increase in residential ISP profit margins) is an interesting recent development that motivates further scrutiny of the economic links between competition in local broadband markets, and prices and quality for US broadband service. The latter topic is the subject of this article.
In the large, the price indexes published by the BLS paint a picture of basically flat Internet service prices. Our working hypothesis is that (at least until recently), government price indexes effectively tracked the nominal price of high-, medium-, and low-end service plans, and that the weighted average price (i.e., a price index) of nominal monthly broadband service plan prices, at the bottom, middle, and top tiers for service, has simply not changed very much over the last decade—at least until recently (after 2017), when it may have started to rise.
Competition between incumbent broadband service providers primarily seems to involve quality upgrades.
Flat nominal service plan prices may be related to the duopoly market structure observed in the majority of local US markets, but this does not mean there is no competition. There is substantial evidence of continuing quality improvement in broadband services across local US markets, evidence that suggests that the primary dimension for residential broadband competition is not service plan price, but service plan quality (primarily download and upload speeds).
This can be seen in Figures 3 and 4, which show the distribution of US census blocks by maximum available download speed from any ISP, from December 2014 through 2018, in urban and rural areas.27 There is a dramatic increase in the availability of higher speeds across the top 85% of census blocks in urban areas—much less so in rural areas, where only the top 40% of blocks experience similar gains. The very large increase from 2016 to 2017 in the median maximum census block speed (from 250 to 940 Mbps) is particularly notable in urban areas. By contrast, the median block maximum speed in rural areas shifts by much less (from 50 to 80 Mbps) over the same period.
The FCC international bureau's estimate of weighted average actual mean broadband speed in the United States, at the national level, rises from 28 Mbps in 2014, to 40 in 2015, and 55 in 2016. This translates into about a 96% increase from 2014 to 2016, and compares with about a 150% increase in median maximum offered download speed within US urban census blocks.28,29 Despite the similarity in observed trends, the 55 Mbps mean for maximum broadband speed delivered to consumers was only a fifth of the magnitude of the median maximum broadband speed available to consumers within urban census blocks in 2016. This suggests that maximum download speeds are priced at premium levels that limit take-up in the population.
FIGURE 3
Evolution of Distribution of Max Download Speed in Urban Census Blocks, 2014–2018.
Source: Authors' calculations based on revised FCC Form 477 data.
FIGURE 3Close modalEvolution of Distribution of Max Download Speed in Urban Census Blocks, 2014–2018.
Source: Authors' calculations based on revised FCC Form 477 data.
FIGURE 4
Evolution of Distribution of Max Download Speed in Rural Census Blocks, 2014–2018.
Source: Authors' calculations based on revised FCC Form 477 data.
FIGURE 4Close modalEvolution of Distribution of Max Download Speed in Rural Census Blocks, 2014–2018.
Source: Authors' calculations based on revised FCC Form 477 data.
The data we just reviewed suggest that maximum available quality (download speed) per census block increased at vastly higher rates than even the 3.4% decline registered by the BLS' quality-adjusted broadband PPI from December 2016 to December 2017. Figure 5 illustrates why we must take care not to assume that increases in maximum available service quality (measured by maximum available download speed) translate into analogous declines in quality-adjusted price levels. The y-axis on this graph measures nominal service price, and the x-axis service quality. The blue line is the original underlying linear “hedonic” relationship between service price and service quality—the “+” symbols are intended to represent hypothetical observed prices, and include idiosyncratic random deviations from the underlying (blue) linear hedonic relationship. Now suppose that a new and higher quality service tier is subsequently introduced (the red dot), and priced using the same linear relationship between price and quality (plus/minus a random deviation), depicted as a red-dashed extension to the blue line. There is zero change in a properly measured quality-adjusted (constant quality) price after the higher quality product is introduced, since the underlying hedonic relationship between price and quality is completely unchanged.30
FIGURE 5
Effect of Increase in Maximum Broadband Service Quality on Quality-Adjusted Price.
FIGURE 5Close modalEffect of Increase in Maximum Broadband Service Quality on Quality-Adjusted Price.
The green dashed line on the other hand, represents an increase in quality that is simultaneously accompanied by a downward shift in the underlying relationship between price and quality, that is, a decline in quality-adjusted (constant quality) price. The figure is drawn to show quality-adjusted price (the y-intercept of the red and green dashed lines) declining by very much less than the relative increase in service quality (maximum download speed), a scenario that actual empirical data seem to make most plausible.
Even with only small improvements over time in quality-adjusted broadband price being observed, ISPs may be highly motivated to introduce new, higher quality speed tiers as technology improves. Higher speed tiers may be much more profitable, and broadband providers are very motivated to shift consumers to higher speeds.31 Higher quality content may require higher speeds, and the local incumbent wireline service providers in monopoly and duopoly blocks typically also have a very profitable business selling premium media content utilizing greater bandwidth to their subscribers.32 Lowering prices for a slower speed service, when network speeds go up as new technology is deployed, in order to attract new customers, may not be a profit-maximizing strategy for incumbent wireline network owners with a large installed customer base.33 However, precisely that strategy (lower quality service at a discount from the price of the closest comparable incumbent's higher quality service plan) may be attractive to entrants lacking a proprietary media content pipeline and a large existing customer base. In effect, technology and costs permitting, it may be the case that new entrants find it profitable to operate as a competitive fringe, offering somewhat lower quality, lower speed service plans at a perceptible discount from the duopoly providers' lowest tier price floor.
There has been very limited entry by new competitors into local broadband service markets since 2014.
(See Figure 6) Although many local markets continue to have very limited numbers of competitors, there nonetheless was some recent entry into a group of the roughly six million populated census blocks in which US households reside. Detailed FCC data that become available after 2014 portray only small changes in market structure at the census block level. In December 2014, there were only one or two ISPs in 59% of all urban populated census blocks. That share declined to 53% by 2017, only to rise again to 56% in 2018.
FIGURE 6
Mean Broadband ISPs per US Urban Census Block, by Tech Type.
Source: Authors' visualization of FCC Form 477 Data, as of 2020 vintage revisions. “Terrestrial” excludes satellite providers.
Urban Census Blocks Rural Census Blocks All ISPs Legacy ISPs Fiber ISPs Wireless ISPs All ISPs Legacy ISPs Fiber ISPs Wireless ISPs year 2014 2.513664 1.926797 0.090764 0.496103 1.785262 1.093092 0.083000 0.609171 2015 2.547585 1.943475 0.100193 0.503916 1.828949 1.113400 0.092667 0.622882 2016 2.608291 1.934584 0.107800 0.565907 1.936327 1.093283 0.108734 0.734309 2017 2.646767 1.942123 0.128379 0.576265 1.974027 1.099701 0.123612 0.750713 2018 2.583767 1.957140 0.113797 0.512830 1.960575 1.115261 0.136108 0.709206 Urban Census Blocks Rural Census Blocks All ISPs Legacy ISPs Fiber ISPs Wireless ISPs All ISPs Legacy ISPs Fiber ISPs Wireless ISPs year 2014 2.513664 1.926797 0.090764 0.496103 1.785262 1.093092 0.083000 0.609171 2015 2.547585 1.943475 0.100193 0.503916 1.828949 1.113400 0.092667 0.622882 2016 2.608291 1.934584 0.107800 0.565907 1.936327 1.093283 0.108734 0.734309 2017 2.646767 1.942123 0.128379 0.576265 1.974027 1.099701 0.123612 0.750713 2018 2.583767 1.957140 0.113797 0.512830 1.960575 1.115261 0.136108 0.709206 FIGURE 6Mean Broadband ISPs per US Urban Census Block, by Tech Type.
Source: Authors' visualization of FCC Form 477 Data, as of 2020 vintage revisions. “Terrestrial” excludes satellite providers.
Close modalUrban Census Blocks Rural Census Blocks All ISPs Legacy ISPs Fiber ISPs Wireless ISPs All ISPs Legacy ISPs Fiber ISPs Wireless ISPs year 2014 2.513664 1.926797 0.090764 0.496103 1.785262 1.093092 0.083000 0.609171 2015 2.547585 1.943475 0.100193 0.503916 1.828949 1.113400 0.092667 0.622882 2016 2.608291 1.934584 0.107800 0.565907 1.936327 1.093283 0.108734 0.734309 2017 2.646767 1.942123 0.128379 0.576265 1.974027 1.099701 0.123612 0.750713 2018 2.583767 1.957140 0.113797 0.512830 1.960575 1.115261 0.136108 0.709206 Urban Census Blocks Rural Census Blocks All ISPs Legacy ISPs Fiber ISPs Wireless ISPs All ISPs Legacy ISPs Fiber ISPs Wireless ISPs year 2014 2.513664 1.926797 0.090764 0.496103 1.785262 1.093092 0.083000 0.609171 2015 2.547585 1.943475 0.100193 0.503916 1.828949 1.113400 0.092667 0.622882 2016 2.608291 1.934584 0.107800 0.565907 1.936327 1.093283 0.108734 0.734309 2017 2.646767 1.942123 0.128379 0.576265 1.974027 1.099701 0.123612 0.750713 2018 2.583767 1.957140 0.113797 0.512830 1.960575 1.115261 0.136108 0.709206 TABLE 1Change over time in mean ISPs per block Decomposition: Change in ISPs/block (%) by ISP Tech Type All ISPs Legacy ISPs Fiber ISPs Wireless ISPs All ISPs Legacy ISPs Fiber ISPs Wireless ISPs change from 2014 to: 2017 0.133103 0.015326 0.037615 0.080162 100.0 11.514321 28.260070 60.225609 2018 0.070103 0.030343 0.023033 0.016727 100.0 43.283279 32.856376 23.860345 Change over time in mean ISPs per block Decomposition: Change in ISPs/block (%) by ISP Tech Type All ISPs Legacy ISPs Fiber ISPs Wireless ISPs All ISPs Legacy ISPs Fiber ISPs Wireless ISPs change from 2014 to: 2017 0.133103 0.015326 0.037615 0.080162 100.0 11.514321 28.260070 60.225609 2018 0.070103 0.030343 0.023033 0.016727 100.0 43.283279 32.856376 23.860345 Source: Authors' calculations based on FCC Form 477 data.
In rural areas, 82% of census blocks had only one or two providers in 2014. This shrank to 74% by 2017, then reversed course and rose slightly to 75% in 2018. As we discuss below, a previous literature links market structure (i.e., competition) to market quality outcomes. In the remainder of this article, we will focus on broadband in urban census blocks, which are very different from rural census blocks, and account for the bulk of both census blocks and US housing units.
Table 1 shows that there was a net increase of about .13 ISPs per census block in urban areas, on average, across the United States, from 2014 to 2017—the high watermark for increased competition in US broadband in the newly revised FCC data. This would be the outcome observed if, for example, on average a new ISP entered the local market in roughly one out of every eight census blocks. This contrasts sharply with the situation portrayed in prior vintages of the current FCC data, where on average a new entrant appeared in about one in every four census blocks through 2018.34
The situation changes substantially if we focus on the following year, 2018, as endpoint in our comparison. Mean providers per urban census block then increases instead by only .07 ISPs per census block after 2014, or on average, a new ISP in 1 out of every 14 census blocks. In rural areas, by contrast, there was a net increase of .18 ISPs per census block from 2014 to 2018.
There has clearly been a significant exit and/or consolidation going on in residential broadband service markets since 2017. These figures seem consistent with trade press accounts of the broadband market, where many of the holding companies for smaller household broadband ISPs are privately held, and difficult to track over time in a systematic way.
Broadband ISPs at the census block level have been classified according to the technologies used to offer service in the census block. An ISP is classified as “Fiber” if it offers broadband service in a census block using fiber to the home, and does not in addition offer either “legacy” cable or DSL-based service to other homes within a block. An ISP is classified as “Wireless” if it offers service using wireless, but not fiber, or “legacy” cable or DSL to connect. An ISP is “Legacy” if it uses either cable or DSL or both to offer service, or makes sole use of “other” (excluding cable, DSL, fiber, and wireless) technologies in serving a block.
One interesting fact is that 60% of the net entry through 2017 came from service providers who used fixed wireless technology to deliver broadband service to an urban census block, and almost 30% of the entry from ISPs using fiber (rather than legacy technologies: cable, DSL, or some combination of cable and DSL with other technologies). With 2018 as the endpoint, however, less than a quarter of a much reduced net entry comes from fixed wireless ISPs, a third from fiber, and over 40% from ISPs using legacy technology.35 Clearly, much of the retrenchment and consolidation that occurred from 2017 to 2018 was wireless (and to some extent fiber) providers either exiting from markets they had previously entered, or adding on legacy technologies to their technology mix in serving a block.
Major technological improvements in fixed wireless technology enabled much of the new wireless ISP entry observed over the 2014 to 2018 period, but did not enable wireless ISPs to provide the highest quality service tiers available in local markets.
Beginning around 2013, communications equipment manufacturers began shipping equipment embodying a new fixed wireless standard, 802.11ac. This newly developed technology standard made use of a set of advances first pioneered in mobile wireless communications, including channel aggregation/binding, beam-forming (use of multiple antennas to shape multiple focused spatial data streams) with multiple user, multiple input-multiple output (MU-MIMO—multiple input and output streams to multiple separate users), and improved modulation techniques. These technologies were deployed in transceivers using radio technology that could make use of both licensed and unlicensed wireless spectrum. These improvements were also incorporated into proprietary (nonstandard) fixed wireless equipment that was marketed to fixed wireless ISPs.
The overall impact was a significant improvement in the efficiency (data-carrying capacity) of spectrum used, faster speeds, longer distance ranges, and lower costs per user served. Effectively, the data-carrying capacity of fixed spectrum was multiplied, and the range for wireless communication was extended,36 even as the cost of the equipment fell. The standard was later improved in “Wave 2” equipment that shipped around 2016, and an even better, improved standard (802.11ax) came to market in 2019.37
Despite these technological improvements, wireless technology as deployed in real-world networks constrained by economic realities was no match for wireline networks in terms of quality, as measured by download speeds. Similarly, the future availability of fifth-generation wireless technology (i.e., 5G) may have a limited competitive impact outside of the densest urban areas. High-speed 5G service is only likely to be an economically attractive option in dense urban areas, and it is also likely that the definition of “high-speed Internet” will change as wireline competitors respond to faster fixed wireless competitors.38
To display speed differences between fixed wireless and wireline networks, we focus on an analysis on the almost 40% of US urban census blocks in 2014 that could be described as legacy (cable/wireline) duopolies. Available FCC data show qualitatively different distributions of maximum download speeds among ISPs in 2014 “legacy duopoly blocks” using these technologies, with fixed wireless ISPs entering these blocks characterized by a distribution of maximum download speeds that is centered an order of magnitude below median speeds for legacy and fiber ISPs in 2018 (Figure 7).
FIGURE 7
Box Plots of Distributions of ISP Download Speeds, by Connection Technology, 2014 and 2018.
Source: Authors' calculations based on FCC Form 477 data. Note that distributions are for individual ISP maximum advertised speeds in blocks identified as 2014 legacy duopoly blocks, not for block maximums of advertised speed in block by technology previously analyzed.
FIGURE 7Close modalBox Plots of Distributions of ISP Download Speeds, by Connection Technology, 2014 and 2018.
Source: Authors' calculations based on FCC Form 477 data. Note that distributions are for individual ISP maximum advertised speeds in blocks identified as 2014 legacy duopoly blocks, not for block maximums of advertised speed in block by technology previously analyzed.
Table 2 displays 2014 legacy duopoly urban block population dynamics over time.39 One hundred percent of the sample were legacy duopoly blocks in 2014. About 22% of blocks in the sample were no longer duopolies by 2018, and about 24% no longer were “legacy” duopolies.40 The other 76% of the population remained legacy duopolies in 2014.
ISPs per Urban Block, 2014 Legacy Duopoly Population
| ISPs/block | 2014 | 2018 | Total |
|---|---|---|---|
| 1 | 0 | 28,782 | 28,782 |
| 2 | 1,565,177 | 1,223,170 | 2,788,347 |
| 3 | 0 | 254,418 | 254,418 |
| 4 | 0 | 50,623 | 50,623 |
| 5 | 0 | 8,055 | 8,055 |
| 6 | 0 | 122 | 122 |
| 7 | 0 | 7 | 7 |
| All Blocks | 1,565,177 1,565,177 | 3,130,354 |
| ISPs/block | 2014 | 2018 | Total |
|---|---|---|---|
| 1 | 0 | 28,782 | 28,782 |
| 2 | 1,565,177 | 1,223,170 | 2,788,347 |
| 3 | 0 | 254,418 | 254,418 |
| 4 | 0 | 50,623 | 50,623 |
| 5 | 0 | 8,055 | 8,055 |
| 6 | 0 | 122 | 122 |
| 7 | 0 | 7 | 7 |
| All Blocks | 1,565,177 1,565,177 | 3,130,354 |
Conclusion
We have analyzed the best available public data, from the FCC and others, on US pre-COVID era residential broadband markets, and have documented six data-driven stylized economic facts about these markets. These data facts raise several questions about the actual effect of competition on prices and quality of residential broadband services:
Broadband services were a significant expenditure for US households.
In most US local broadband markets, there were very limited numbers of competing residential broadband ISPs. In 2018, 56% of urban and 75% of rural census blocks had two or fewer providers—showing very little decrease from levels for these shares in 2014. Further, 2017 was a high watermark for competition, with declines in mean and median competitors per block registered over 2017 to 2018.
Residential broadband service prices have not been decreasing much over time in the US Nominal service plan prices have basically been flat, and quality-adjusted prices have fallen relatively slowly.
Quality competition nonetheless seems to be important in US residential broadband. Small numbers of competitors notwithstanding, most urban census blocks have experienced great improvement in maximum speeds available to households. Gigabit-class download speeds (900+ Mbps) were available from at least one provider in 85% of urban census blocks in 2018, compared to 5% of blocks in 2014. In (much larger spatially) rural blocks, gigabit availability rose to roughly 37% in 2018 from about 3% in 2014.
There was very limited entry by new residential broadband service competitors. In urban areas, mean ISPs per census block increased by .07, in rural areas, by .18.
Technological innovation in wireless service provision powered much of the new entry visible over the 2014 to 2018 period, but the new competition from wireless ISPs was almost entirely restricted to lower tier quality broadband service. Furthermore, after 2017, there was considerable exit of fixed wireless ISPs from local markets.
We illustrated how slow declines in quality-adjusted prices measured in official and unofficial price indexes for broadband services in United States are not inconsistent with big improvements in the highest quality residential broadband services available in local (terrestrial) residential broadband markets. Continuing technological innovation in residential broadband services appears most concretely to the local broadband consumer in the form of increased availability of gigabit-class service in both urban and rural areas.
This contrasts with relatively slow decline in rates in quality-adjusted prices for the lower-quality tiers of broadband service that seem to have accounted for most residential broadband consumption in pre-COVID US terrestrial broadband markets. Understanding just how much of variation over time in both quality and price is attributable to change in the competitive structure of local markets versus technological change is an important area for future research. The COVID-driven, forced migration of both economic and social activities onto online platforms in 2019 makes these evolving facts and their connection to policy even more important in a future post-COVID broadband era.
FOOTNOTES
The authors have no affiliation with any entity with an interest in telecommunication policy matters before the FCC or other regulatory bodies, nor have they received financial support from such entities in recent decades.
We use the term “stylized facts” in the sense commonly employed by economists, and first introduced by Nicholas Kaldor in an address to the International Economic Association published in 1961: facts that are true in the large, describing broad tendencies, while not necessarily correctly describing every individual instance or detail. See Kaldor, 177.
The potential large welfare effects of broadband availability support efforts by US federal agencies and entities to promote more universal broadband access. The FCC funds several programs under the aegis of the Universal Service Fund. Other examples included large grant programs managed by the National Telecommunications and Information Administration that promoted the deployment and the use of broadband: the Broadband Technology Opportunities Program (BTOP) and the State Broadband Initiative (SBI). The Department of Agriculture administers a Rural Development Broadband ReConnect Program, which includes grants and loans to provide high-speed broadband service in eligible rural areas.
We note, however, that it is plausibly argued that the typical US household would make little use of broadband bandwidth over about 100 Mbps. See for example Ramachandran et al.
An appendix briefly reviews the history and limitations of the FCC Form 477 data we are using to measure both market structure and service quality.
In the Communication Marketplace Report, the FCC analyzes services delivering voice, video, audio, and data services, among others.
FCC, 2020 Broadband Deployment Report.
Flamm and Varas, “The Evolution of Broadband Competition.”
A limitation of Whitacre and Gallardo is that they use county-level data for their analyses.
Wilson (2019) also studies multimarket contact effect on download speeds offered by ISPs.
This would not be the case in rural areas because a rural census block can be a wide geographic area (possibly hundreds of square miles) where an ISP could face very large additional costs in order to offer service to other households in the same rural block. We believe that the main source of unreliability for FCC Form 477 data in urban areas is fixed wireless ISP counts, with substantial noise in provider counts reported for ISPs using this technology. Flamm and Varas (“Technological Innovation and Quality Improvement”) propose dealing with this problem by using instrumental variables.
https://www.fcc.gov/general/broadband-deployment-data-fcc-form-477. Note that prior to 2014, service providers only reported their data for areas in which they actually had subscribing customers. See Flamm and Varas (“The Evolution of Broadband Competition”) for a detailed discussion of the 477 data definitions and how they have changed over time, along with an analysis of historical trends in competition in local markets.
The problem is particularly noticeable in Texas, where wireless providers seem to pop up in urban areas for a year or two, then exit from the FCC dataset. The metropolitan Dallas area has one such “phantom” wireless provider popping up in the FCC Form 477 records as serving most of the Dallas area for a short period, before vanishing with no evident trace. One of the authors' homes is in a census block in the Austin suburbs (literally a single suburban city block), which has long been a good example of the classic cable-DSL duopoly. For a couple of years in the middle of our study period, a wireless provider apparently reported serving this block on its Form 477, but appears to have made no active attempt to win any customers or even advertise availability of its service to residents, to the best of our knowledge. A likely but problematic scenario leading to such misleading reporting would be a wireless service provider setting up an antenna on high ground in a rural area on the periphery of a city in order to serve primarily rural customers, then reporting all city blocks within line-of-sight of this antenna, as determined by some automated computer calculation, as “offered service” on FCC forms.
The FCC has continued efforts to make its Form 477 reporting data more useful. For example, in August 2019, the FCC established the Digital Opportunity Data Collection and modernized the FCC Form 477 Data Program (FCC, Report and Order and Second Further Notice). Additionally, the US Congress enacted the Broadband Deployment Accuracy and Technology Availability Act in 2020, which seeks to increase the accuracy of FCC broadband availability maps by improving the process by which the data is collected.
There will be two separate records if the service is available for both residential and business consumers.
Conversation with FCC data administrator, Washington, DC, September 2018.
Because of the change in Form 477 definition of areas served (from actual customers pre-2014, to “could serve”), in most urban markets and even in many rural census blocks there was a noticeable uptick in numbers of providers after 2013 (typically, by two or more providers). Much of this increase was related to satellite-based ISPs now being included in the ISP counts, even for urban census blocks in which they rarely if ever sold a competitive service offering to paying customers. (The theoretical service footprint of the major satellite-based ISPs covers most of the continental United States). The FCC clearly took note of this, since beginning in 2014, publicly released data on ISPs by census block distinguish between counts including and excluding satellite-based service providers.
Also, although satellite ISPs can provide upload and download speeds for digital content comparable to fixed terrestrial broadband service, latency (the round-trip time to send, then receive a single digital packet) is about 20 times greater with satellite service, using technology available over the 2014 to 18 period. This significantly affects interactive applications, like gaming, or point and click applications (like moving or zooming dynamically on a map or menu). Based on stated preference survey data, one study estimates that a representative consumer would be willing to pay $8.66 monthly to avoid the increased latency associated with moving from terrestrial to satellite broadband service, at a given download/upload speed. Liu, Prince, and Wallsten.
If a provider does not offer service with a given technology set (either wireline or wireless), then its maximum advertised speed is defined as missing, not zero.
Although we do not observe the share of households served by various individual providers within a census block, the inverse of our market structure measure (1/N)—with N the sum of the provider counts across technology types—defines a lower bound on the Herfindahl–Hirschman Index (HHI) of concentration (with 1 defined as the upper bound HHI were all households in a block served by a single provider).
FCC, International Broadband Data Report.
At purchasing power parity exchange rates in an international comparison using the US distribution of households across speed tiers to weight-fixed standalone broadband plan prices, the FCC found that its index of US prices—$61.65— ranked 21 out of 29 countries (where Chile, country 29, is the most expensive—$80.71, and Finland, country 1, at $35.11, was the least expensive). Controlling for factors affecting demand (like income) and cost (like population density), a hedonic price index still puts the United States in the top to middle of the price band. Only by adding quantity of broadband data consumed or country language as hedonic characteristics (which raise conceptual and econometric issues) does the United States move into the bottom quartile of an international price comparison. See FCC, International Broadband Data Report, Sixth Report, Docket GN Docket No. 17-199, Appendix C.
In 2002, a report from the National Research Council used the following taxonomy of US broadband geographies: type 0 (no terrestrial providers of broadband; satellite only), type 1 (one terrestrial provider), type 2 (two terrestrial providers—either the incumbent cable and telephone service providers, or one of the incumbents and a new entrant [overbuilder]), and type 3 (more than two providers; overbuilders plus the incumbent cable or telephone companies). Types 1 and 2 above mentioned correspond to what we refer to as “monopoly or duopoly” blocks. “The financial viability of type 3 competition—and prospects for competition beyond that offered by the incumbent telephone and cable companies—will be tested over the next few years.” See National Research Council, 21–22.
That is, index behavior is consistent with use of item substitution, without any hedonically valued adjustment for quality, as service plan characteristics change over time.
In the case of the PPI, beginning in December 2016 the BLS began to employ a hedonic quality adjustment to its wireline Internet service price PPI, reporting a quality-adjusted (constant quality) price index that reflected market valuation of speed improvements. (For the official description of the PPI, see https://www.bls.gov/ppi/broadbandhedonicmodel.htm.) Prior to that date, there apparently was no sustained effort to adjust these indexes hedonically and report a quality-adjusted price index that reflected significant improvements to download speeds in both higher and lower end service tiers. The CPI, by contrast, published an experimental methodology for hedonic quality adjustment back in 2008 (https://www.bls.gov/opub/mlr/2008/07/art3full.pdf) and the CPI description on the BLS website makes reference to substitution of similar new products for old products in price indexes, subject to the occasional hedonic quality adjustment. (For the CPI, see https://www.bls.gov/cpi/factsheets/telecommunications.htm.) But the trend over time in the CPI generally matches the flat prices found in the PPI prior to the beginning of the PPI hedonic quality adjustments in 2017.
Greenstein and McDevitt, 16–19
Flamm and Herrera.
Flamm and Herrera (2017) summarize their results over the 2014 to 2016 period: “Our hedonic price index shows quality-adjusted prices declining at annualized rates of approximately 3 to 4 percent in 2014 and 2015, with a rate of decline in quality-adjusted price close to zero in 2016.”
The FCC Form 477 data reports the maximum advertised download speed, which is not equivalent to the actual download speed experienced by consumers. However, maximum advertised download speeds are still informative about which speeds are potentially available to residential consumers.
The increases on download speeds of wireline ISPs could be a preemptive strategy against potential competition caused by the potential entry of new mobile 5G and fixed wireless 5G providers.
The FCC estimates are based on proprietary Ookla Speedtest data aggregated at the city level. City-year observations are collapsed to the country-year level and are weighted by the number of tests.
This does not mean that consumer welfare has not increased. Any consumer observed shifting to the new, higher quality plan reveals that her willingness to pay for the newly available higher quality service equals or exceeds the higher price. But constant-quality price has not changed; the consumer gain comes entirely from the higher quality service that is now available to consumers with a greater willingness to pay for quality, and not from a reduction in price for a given quality of service affecting all consumers.
For anecdotal evidence of this provided by journalists, see Ramachandran et al.
High-speed Internet is likely to boost user Internet consumption, so higher speed tier plans may be offered with monthly data caps and surcharges for exceeding them. For example, in December 2020, AT&T announced data caps of 150 GB per month for DSL clients, and 250 GB per month for fixed-wireless clients.
The new service plan might cannibalize too many existing customers from higher-priced, more profitable service tiers.
Compare this to a net increase of about .26 ISPs per census block, on average, across the United States, from 2014 to 2018 in the original, unrevised FCC data prior to the 2019 revisions.
One plausible explanation for the apparent entry of new DSL ISPs into US broadband markets is that as incumbent DSL providers overlaid their copper twisted pair connections to residences and businesses with fiber in order to offer higher speeds, their existing copper telephone lines were being leased to small local ISPs providing lower speed DSL service over the now unused copper twisted pairs that remained in place.
For a detailed explanation of these technological advances, see, for example, https://www.duckware.com/tech/wifi-in-the-us.html.
The same technologies are used in 5G equipment, and the new 5G standard effectively unifies mobile and fixed wireless communications standards.
For instance, new technology in the DOCSIS 3.1 cable broadband standard has been branded as “10G” by cable wireline ISPs. In Flamm and Varas (“Technological Innovation and Quality Improvement”), we find that the entry of fixed wireless and fiber providers seems not to have had a significant effect on maximum quality available in census block level markets.
A small number of singleton blocks not present in both 2014 and 2018 were dropped, creating a balanced sample of about 1.6 million urban blocks. Despite the very small changes in population mean ISPs per block evident in Figure 6, there was significant variation in this subpopulation, at the block level, that gets averaged out in overall population means.
“Legacy duopoly” 2014 blocks that no longer fit this description constituted 23.6% of the sample in 2018. Some of the 2018 duopoly blocks were no longer considered “legacy duopoly” because their technology composition changed—for example, transitioning from two legacy tech ISPs, to one legacy tech ISP and one fiber ISP.
The history of the FCC's Form 477 program is summarized in FCC, Modernizing the FCC Form 477 Data Program, Final Rule. The FCC originally published this data in the form of a list of zip codes in which broadband service provider reported any customers, and the number of providers reporting customers in the zip code (with numbers of providers in the one to three range per zip code censored, and reported as an “*.” Unfortunately, zip codes with no end users reported were not shown in the public list, which made these data of limited utility to researchers and policymakers, since zip codes were created and withdrawn by the postal service frequently, and zip codes were never actually used to define stable spatially defined areas.
FCC, Modernizing the FCC Form 477 Data Program, Final Rule. The speed tiers reported by mobile wireless providers appear to have corresponded to what generation (2G, 3G, 4G non-LTE, 4G LTE) of mobile wireless technology was available to serve customers in a census tract.
The National Broadband Plan actually set a 4/1 Mbps benchmark, but the 3/.768 Mbps tier in the National Broadband Map that was being constructed at the time was the closest speed tier to this benchmark, and ended up becoming the original “NBP broadband speed.”
APPENDIX: The FCC Form 477 Data
Since 2000, the FCC has been collecting data on the availability of broadband service across the United States. The original May 2000 Form 477 required “facilities based” broadband service providers to provide a list of all 5-digit ZIP codes in which they provided service to at least one end user, and defined high-speed service connections as those with data transfer rates exceeding 200 kbps.41 The data was collected twice a year, in June and December.
In 2008, the program was revised significantly: the geographic unit for data collection became the census tract. Fixed wireline and wireless ISPs, as well as satellite providers, now had to report total subscribers by census tract, broken down by technology and speed tier, and the share of those subscribers that were residential customers. Mobile wireless broadband providers were asked to list the census tracts that “best represent” their broadband service footprint, by service tier quality.42 Beginning around this time, public data released by the FCC, derived from this form, was expanded to include the numbers of mobile wireless providers serving a census tract (as with fixed broadband data, results for the range of one to three providers were censored, as were numbers of mobile providers exceeding a cap of seven), and a qualitative coding of the share of households in a census tract with broadband service was added to the public version of the Form 477 dataset.
Shortly afterward, in 2009, in association with passage by Congress of the American Recovery and Reinvestment Act of 2009 (which contained approximately $7.2 billion for broadband-related investment projects), the FCC was directed to create a National Broadband Plan (NBP), released in March 2010. In parallel, when the FCC released 477 data for June 2009, the public release of the 477 data also began reporting numbers of broadband providers exceeding a faster “NBP” threshold of 3 Mbps download, 768 kbps upload speeds, by census tract.43 In August 2013, the FCC revised its 477 program once again. Most importantly, it required fixed service ISPs (including satellite as well as fixed wireline and wireless providers) to submit the lists of all census blocks (vs. tracts) “where they offer service” (vs. where they have actual subscribers!). Finally, in late 2014, the FCC revised the rules for its Connect America Fund (subsidies supporting fixed rural broadband) to require minimum 10/1 Mbps connection speeds. Form 477 data submitted from 2014 on report maximum speeds (by technology) of fixed broadband service ISPs, by census block.
