Broadband Data Released and Comment Sought on Benchmark Calculation
News Media Information 202 / 418-0500
445 12th Street, S.W.
Washington, D.C. 20554
Released June 30, 2014
WIRELINE COMPETITION BUREAU ANNOUNCES POSTING OF
BROADBAND DATA FROM URBAN RATE SURVEY AND
SEEKS COMMENT ON CALCULATION OF
REASONABLE COMPARABILITY BENCHMARK FOR BROADBAND SERVICES
WC Docket No. 10-90
Comments: [30 days after publication in the Federal Register]
In this Public Notice, the Wireline Competition Bureau (Bureau) proposes a specific methodology
for calculating the reasonable comparability benchmark for fixed broadband services. In the USF/ICC
Transformation Order, the Commission required that as a condition of receiving Connect America Fund
support, recipients must offer voice and broadband services in supported areas at rates that are reasonably
comparable to rates for similar services in urban areas.1 The methodology proposed here would result in a
broadband benchmark that ranges from $68.48 to $71.84 for services meeting the current broadband
performance standard of 4 Mbps downstream/1 Mbps upstream, with the specific benchmark depending on
the associated usage allowance. The Bureau also announces the posting of the fixed broadband services data
collected in the 2013 urban rate survey, and explanatory notes regarding the data, on the Commission’s
On November 18, 2011, the Commission released the USF/ICC Transformation Order and FNPRM,
which comprehensively reformed and modernized the universal service and intercarrier compensation
In the Order, the Commission directed the Wireline Competition Bureau and Wireless
Telecommunications Bureau (together, the Bureaus) to conduct a survey of residential urban rates for fixed
voice, fixed broadband, mobile voice, and mobile broadband services.3
The Commission concluded that
rural broadband rates would be deemed “reasonably comparable” to urban rates under section 254(b)(3) if
they fell within a reasonable range of urban rates for reasonably comparable broadband service.4
the Bureaus to develop a specific methodology for defining that reasonable range.5
1 Connect America Fund et al., WC Docket No. 10-90 et al., Report and Order et al., 26 FCC 17663, 17693, 17695,
paras. 81, 86 (2011), aff’d sub nom. In re: FCC 11-161, 2014 WL 2142106 (10th Cir. May 23, 2014) (USF/ICC
Transformation Order). See also 47 U.S.C. § 254(b). Recipients are also required to submit pricing data for both their
voice and broadband offerings with their annual reports. 47 C.F.R. § 54.313(a)(7); USF/ICC Transformation Order, 26
FCC Rcd at 17856, para. 594.
2 USF/ICC Transformation Order, 26 FCC Rcd at 17667, para. 1.
3 Id. at 17694, para. 85, 17708, para. 114.
4 Section 254(b) (3) specifies that consumers in rural and high-cost areas should have access to services that “are
reasonably comparable to those services provided in urban areas, and that are available at rates that are reasonably
comparable to rates charged for similar services in urban areas.”
5 USF/ICC Transformation Order, 26 FCC Rcd at 17704, para. 113.
In the Further Notice, the Commission sought comment on how specifically to determine whether
rural rates are within a reasonable range of the national average urban rate for broadband service.6
particular, the Commission noted that in the voice context, states must certify that basic voice rates for non-
rural carriers are no more than two standard deviations above the national average.7
It asked whether it
would be appropriate in the broadband context to use two standard deviations for the broadband reasonable
In response to the Commission’s directives, in April 2013, the Bureaus adopted an order setting the
form and content for a survey of urban rates for fixed voice and broadband residential services.9
Wireline Competition Bureau (Bureau) initiated the survey in December 2013 and collected the rates offered
by a statistically valid sample of providers of fixed services identified using FCC Form 477 data in 500 urban
As explained in the Staff Report attached hereto and shown in the data posted on the Commission’s
website, the Bureau collected 2,105 monthly rates for broadband service in urban areas.11 The reported
download speeds ranged from .5 Mbps to 20,480 Mbps while the upload speeds ranged from 1.125 Mbps to
In addition to varying speeds, the service offerings differed as to usage allowances, if one
Consistent with longstanding Commission precedent for the voice comparability benchmark, we will
compute the broadband comparability benchmark based upon a national average.13
Indeed, the Commission
made clear that it expected the Bureau to use a national urban average.14
The attached Bureau Staff Report discusses three potential methods for determining the average
urban rate using the data collected in the Survey: simple rate statistics for specified subsamples; an average
rate for offerings meeting a minimum level of service; and regression analysis.15
The Staff Report also
6 USF/ICC Transformation Order, 26 FCC Rcd at 18046-47, paras. 1018-27.
7 Id. at 18046-47, para. 1026.
9 Connect America Fund, WC Docket No. 10-90, Order, 28 FCC Rcd 4242 (Wireline Comp. Bur./Wireless Tel. Bur.
10 Wireline Competition Bureau Announces Timeline for Completion of Urban Rates Survey, WC Docket No. 10-90,
Public Notice, 28 FCC Rcd 16753 (Wireline Comp. Bur. 2013). The Staff Report attached to this Public Notice
provides additional information regarding how the survey was conducted. Wireline Competition Bureau Staff Report:
Possible Methodologies for Establishing Reasonably Comparable Broadband Rates for Fixed Services at 2-4 (rel. June
30, 2014) (Staff Report).
11 Staff Report at 4. In response to the USF/ICC Transformation FNPRM, several parties argued that comparability
benchmarks for mobile and fixed services should be addressed separately. See, e.g., Comments of Alaska
Communications Systems Group, WC Docket No. 10-90 et al. at 8 (filed Jan. 18, 2012), Comments of CTIA—The
Wireless Association, WC Docket No. 10-90 et al. at 10 (filed Jan. 18, 2012). We address only the reasonable
comparability benchmark for fixed services in this Public Notice.
12 Staff Report at 4.
13 USF/ICC Transformation Order, 22 FCC Rcd at 17694, para. 84. As noted above, the Commission has already
solicited comment regarding whether use of two standard deviations provides an appropriate range. Id. at 18046-47,
14 Id. at 17708, para. 114 n.187 (stating that the Bureau should use FCC Form 477 data if possible to calculate a national
average urban rate for broadband).
15 Staff Report at 5-6.
presents the average plus two standard deviations for each approach, thus showing a potential reasonable
comparability benchmark for broadband service under each approach.
For illustrative purposes, the Staff
Report also presents the relevant calculations if the minimum performance obligations were modified as
proposed recently by the Commission. 16
The first approach calculates the average using a subsample of observations based solely on
download speed, without regard to usage or upstream speeds. The second approach calculates the average by
identifying the subset of observations that meet or exceed a minimum service level, and then for each
provider that is captured in that sub-sample, computing the average based on the lowest rate offered by that
provider that meets or exceeds the specified service level. The third approach uses a simple weighted linear
regression model that takes into account the impact of three dimensions of service on rates: upload speed,
download speed, and usage allowance, if any. We summarize below the results under the three approaches.
3 to <5 Mbps/
Meeting 3 to <5 Mbps
4 Mbps/1 Mbps
Meeting or Exceeding a
Minimum Service Level
4 Mbps/1 Mbps
4 Mbps/1 Mbps
4 Mbps/1 Mbps
We propose to use the weighted linear regression model to calculate the average urban rate.
Although the regression analysis is more complex than the other methods identified in the Staff Report,
regression analysis is well suited to take into account the differences in speed and usage allowance among
the service offerings in the sample (and thus reducing the likelihood of having the rates for dramatically
higher-speed services increase the benchmark for lower-speed services). Further, we propose to use a
subsample of data points to develop the regression, specifically, those data points with download speeds less
than or equal to 15 Mbps.17
We propose to adopt a separate benchmark for services with differing usage
levels. Thus, the reasonable comparability benchmark for a high-cost recipient offering a 4 Mbps/1
Mbps/100 GB offering would be $68.48; if that high-cost recipient chose to meet the Commission’s
broadband performance obligations with a 4 Mbps/1 Mbps/unlimited usage offering, its reasonable
comparability benchmark would be $71.84. We seek comment on these proposals.
16 Recently, the Commission proposed to increase the download speed requirement to 10 Mbps for all entities subject to
broadband public interest obligations and proposed that such entities offer at least one service offering at least 100
gigabytes (GB) of usage. Connect America Fund, WC Docket No. 10-90 et al., Report and Order, Declaratory Ruling,
Order, Memorandum Opinion and Order, Seventh Order on Reconsideration, and Further Notice of Proposed
Rulemaking, FCC 14-54, para. 138 (rel. June 10, 2014). The Bureau has specified that price cap carriers accepting
model-based support must offer at least one service plan with at least a 100 GB minimum usage allowance. Connect
America Fund, WC Docket No. 10-90, Report and Order, 28 FCC Rcd 15060, 15060-61, para. 2 (Wireline Comp. Bur.
17 There is increased variability in rates for the services with higher download speeds.
To the extent parties believe one of the other approaches to determining an average of the data
collected in the Survey is preferable, they should explain with specificity the benefits of adopting an
alternative approach. Is there some other method of calculating the average urban rate that would better
account for the differences in speed and usage allowance among the service offerings?
Pursuant to sections 1.415 and 1.419 of the Commission’s rules, interested
parties may file comments on or before the dates indicated on the first page of this document.18
may be filed using the Commission’s Electronic Comment Filing System (ECFS).19
Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS:
Paper Filers: Parties who choose to file by paper must file an original and one copy of each filing. If
more than one docket or rulemaking number appears in the caption of this proceeding, filers must submit two
additional copies for each additional docket or rulemaking number.
Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class
or overnight U.S. Postal Service mail. All filings must be addressed to the Commission’s Secretary, Office
of the Secretary, Federal Communications Commission.
All hand-delivered or messenger-delivered paper filings for the Commission’s Secretary must be
delivered to FCC Headquarters at 445 12th St., SW, Room TW-A325, Washington, DC 20554. The filing
hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners.
Any envelopes and boxes must be disposed of before entering the building.
Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be
sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.
U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street, SW,
Washington DC 20554.
People with Disabilities: To request materials in accessible formats for people with disabilities (Braille,
large print, electronic files, audio format), send an e-mail to firstname.lastname@example.org or call the Consumer &
Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (tty).
In addition, one copy of each pleading must be sent to each of the following:
Jay Schwarz, Industry Analysis and Technology Division, Wireline Competition Bureau, 445 12th
Street, S.W., 6-A134, Washington, D.C. 20554; e-mail: Jay.Schwarz@fcc.gov.
Alexander Minard, Telecommunications Access Policy Division, Wireline Competition Bureau, 445
12th Street, S.W., 5-A334, Washington, D.C. 20554; e-mail: Alexander.Minard@fcc.gov.
The proceeding this Notice initiates shall be treated as a “permit-but-disclose” proceeding in
accordance with the Commission’s ex parte rules.20
Persons making ex parte presentations must file a copy
of any written presentation or a memorandum summarizing any oral presentation within two business days
after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making
18 47 C.F.R. §§ 1.415, 1.419.
19 See Electronic Filing of Documents in Rulemaking Proceedings, GC Docket No. 97-113, Report and Order, 13 FCC
Rcd 11322 (1998).
20 47 C.F.R. §§ 1.1200 et seq.
oral ex parte presentations are reminded that memoranda summarizing the presentation must (1) list all
persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and
(2) summarize all data presented and arguments made during the presentation. If the presentation consisted
in whole or in part of the presentation of data or arguments already reflected in the presenter’s written
comments, memoranda or other filings in the proceeding, the presenter may provide citations to such data or
arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or
paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the
memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be
written ex parte presentations and must be filed consistent with rule 1.1206(b). In proceedings governed by
rule 1.49(f) or for which the Commission has made available a method of electronic filing, written ex parte
presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be
filed through the electronic comment filing system available for that proceeding, and must be filed in their
native format (e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize
themselves with the Commission’s ex parte rules.
For further information about this Public Notice, please contact Jay Schwarz, Industry Analysis and
Technology Division, Wireline Competition Bureau, at (202) 418-0940; or at TTY (202) 418-0432.
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