FRED UPTON, MICHIGAN FRANK PALLONE, JR., NEW JERSEY CHAIRMAN RANKING MEMBER ONE HUNDRED FOURTEENTH CONGRESS ([011ngsz of the ??ntteh ?atates 590115?: at Representatives COMMITTEE ON ENERGY AND COMMERCE 2125 RAYBUHN HOUSE OFFICE BUILDING WASHINGTON, DC 20515?6115 MajorIty (202) 225-2927 Minority (902)22573641 February 5, 2016 The Honorable Torn Wheeler Federal Communications Commission 445 12th Street, S.W. Washington, DC 20554 Dear Chairman Wheeler: The Communications Act requires the FCC to assess and report on the state of broadband deployment, the level of video competition, and the level of effective competition in the nation?s mobile wireless market. Since 2011, it appears that the Commission has applied inconsistent de?nitions and analyses in making those determinations. Those reports have then been used to justify Commission actions to intervene in seemingly competitive markets. Despite the plain language of the Communications Act, the actions seem to bene?t speci?c classes of competitors and do not promote competition. This behavior concerns us. In the Telecommunications Act of 1996, Congress directed the FCC to study and report annually on the availability of ?advanced telecommunications services.? Speci?cally, Section 706(b) requires the FCC to conduct an annual inquiry concerning the availability of ?advanced telecommunications services? and determine whether such services are being deployed to all Americans in ?a reasonable and timely fashion.? Congress has also directed the FCC in the event the FCC concludes that advanced telecommunications services are not being deployed in a reasonable and timely fashion to all Americans to take immediate action to accelerate deployment ?by removing barriers to infrastructure investment and by promoting competition in the telecommunications market (emphasis added).? The plain language of Section 706 clearly states that the FCC should rely on the private sector to spur deployment and that the FCC should help incent private investment by removing barriers and promoting competition. Prior to 2010, the FCC had found in its Section 706 reports that broadband deployment overall was reasonable and timely, although much work still needed to be done to promote deployment for all Americans. Yet in a 2010 party-line vote, the Commission changed its de?nition and raised the threshold speeds for what services qualify as broadband. As a direct Letter to The Honorable Tom Wheeler Page 2 result of its new de?nition, the FCC concluded that broadband was not being deployed in a reasonable and timely fashion. Under your leadership, the FCC did the same thing in January 2015 when it adopted the 2015 Broadband Progress Report. This time, the agency increased the minimum speed for broadband six-fold from 4 and 1 upstream to 25 and 3 upstream. Immediately, systems that were considered broadband during the period of the report, were now excluded from being counted. Not surprisingly given the newly minted de?nition of broadband, the FCC concluded on a party?line vote that broadband was not being deployed in a reasonable and timely fashion. This new de?nition of broadband gave Americans three different ?avors of Internet access: dial-up, broadband over 25 Mbps, and other Internet access that is not broadband by the de?nition. This construction proved quickly inconvenient for the agency and lead to yet another de?nition of broadband to suit the Commission?s regulatory ends. Rather than rely on the 25/3 standard adopted in January, the FCC chose an amorphous, subjective de?nition of broadband to regulate a broader set of services under its February 2015 Open Internet Order. Instead of uniformity of de?nition, the Commission has instead made broadband speed a variable in the regulatory equation. This represents the latest in series of troubling actions that distort or outright ignore the requirements to produce honest, data-driven reports to inform policymakers and the public. For example, the FCC is required by law to report annually on the state of competition in the wireless market. Starting in 2010, the agency determined that it was too dif?cult to de?ne effective competition in the mobile wireless market, and stopped making any competitive determination at all. Last month, the agency again failed to determine whether the wireless market is effectively competitive. In fact, recent studies show that 80% of Americans have a choice of ?ve or more wireless providers. Moreover, the agency?s claimed inability to de?ne effective competition in the mobile wireless market stands in stark contrast to its approach to the video market, where the Commission recently adopted a presumption that cable Operators are subject to effective competition. In the video market there are two nationwide providers and myriad local and regional providers. Whereas in the mobile wireless market there are four nationwide providers, more than one hundred regional providers (some of whom have overlapping coverage areas), and non?facilities based options that also provide retail competition. Interestingly, the FCC failed to present any evidence that the video market is less complex than the market for mobile wireless services or offer any data or analysis to justify treating ?effective competition? differently in these two communications. markets. Just last week, the agency issued its annual Broadband Progress Report at its January 28, 2016 Open Meeting. In it, the FCC again concludes that ?advanced telecommunications capability is not being deployed in a reasonable and timely fashion to all Americans.? The lead factor supporting your conclusion is that ?[a]pproximately 34 million Americans still lack access Letter to The Honorable Tom Wheeler Page 3 to ?xed broadband at the benchmark speed of 25 for downloads, 3 for uploads.? To help us understand the decision?making and the impact of the shifting de?nitions of broadband and effective competition, we request your responses to the following questions no later than February 19, 2016: 1. Please describe how the Commission has taken action to accelerate the deployment of broadband by removing barriers to infrastructure investment or promoting competition: a. When the FCC changed the de?nition of broadband in 2010, what barriers to infrastructure investment were removed and how did the change promote . competition? What speci?c improvements to broadband acceleration resulted from the actions? b. In light of the Commission?s conclusion that 25 broadband is not being timely deployed, what ?immediate action? are you prepared to take to remove barriers to infrastructure investment and promote competition? Please describe the speci?c steps and your proposed timetable. 2. Please explain why the FCC settled at 25 upstream for the de?nition of broadband, including the facts about the market that led you to conclude that 25 is the appropriate minimum threshold to qualify as broadband. Please explain what speci?c factors led you to conclude that 4 and 1 upstream was insuf?cient. 3. Please identify all contexts and instances in which the FCC de?nes broadband. Why does the Commission not have a de?nition of broadband that it applies consistently? 4. Please describe in detail why the Commission does not have a de?nition of competition that it applies consistently? How many choices in a given market would lead the Commission to ?nd mobile wireless service effectively competitive? Please explain in detail why the Commission continues to fail to make a competitive ?nding for the wireless market? We appreciate your assistance with these requests and ask for your response no later than ten days from the date of this letter. If you or your staff have any questions, please feel free to contact David Redl of the Committee staff at (202) 225?2927. Thank you for your cooperation in this matter. Letter to The Honorable Tom Wheeler Page 4 Sincerely, Fr Upton airman Chairman Subcommittee on Communications and Technology cc: The Honorable Frank Pallone, Jr., Ranking Member The Honorable Anna G. Eshoo, Ranking Member Subcommittee on Communications and Technology