Building the Road to Fiber and 5G – Choosing the Right Policy Matters

Wednesday, April 13th, 2016

The Federal Communications Commission (FCC) is preparing to designate spectrum for 5G this summer, a step that will help establish America’s global leadership in next generation technologies. Meeting the 5G challenge will require building new fiber connections to thousands of 5G sites. Similarly, American businesses across the country need more fiber connections. To meet these challenges we will need FCC policies that incent companies to invest billions of dollars in the newest and fastest technologies, particularly fiber optic connections. To get to the right policies, the commission should pay particular attention to past strategies – both those that have worked and those that didn’t.

 

Sustainable competition comes from facilities-based providers, not resellers. As FCC Chairman Tom Wheeler said in a recent interview, “”you want to create an environment where people are going head to head … how can you ever win if you have to buy your capacity from your competitor?”

 

Some argue that increasing FCC price controls over business data services will help ensure rapid deployment of connectivity for 5G cell sites. Very recent history directly and emphatically contradicts such claims. In particular, 4G mobile deployment has been an unmitigated success in the U.S., bringing innumerable benefits to consumers and businesses in a very short period of time. In just two years, from 2009 to 2011, 4G mobile broadband availability from multiple providers increased from nearly zero to more than 70 percent of the U.S. population, according to national broadband map data.

 

By 2014, 4G was available to more than 98 percent of Americans. Upgrading the copper links connecting cell towers and data networks with fiber and Ethernet business data services was critical to the U.S. 4G success – and this occurred against the current backdrop of pricing flexibility and regulatory forbearance for business data services. By contrast, more heavily regulated Europe is still trying to catch up. In 2011, only eight percent of Europeans had 4G mobile available to them and by 2014 4G availability had grown to only 79 percent, according to European commission data.

 

The commission should learn from its own success: 4G worked. Business data service competition has been growing every year under the commission’s current policies and companies are investing in connecting more businesses and cell sites with fiber every day. Changing ground and forcing the first companies – whether traditional telcos, CLECs or cable providers – that invested in constructing facilities to deliver business data services to simply turn them over at FCC-set prices to companies that choose to skip their own investing will not connect us to new 5G services or incent investment to get American businesses and consumers the modern facilities they need to compete in today’s global economy.