Cable Networks Risk Being Left Behind in Biden’s Broadband Campaign

Cable Networks

The Biden administration’s multibillion-dollar investment budget requires $100 billion to deliver high-speed internet to any American, a plan that is certain to garner support from service providers. However, cable providers such as Comcast Corporation and Charter Communications Inc., which connect about two-thirds of all broadband-connected homes in the United States, are concerned that the plan’s explicit call for “future-proof” infrastructure would make them vulnerable to subsidized rivals.

This is because the existing coaxial lines that cable providers choose to utilize to service most of their customers are incapable of supporting the upload rates that customer activists believe should be necessary to qualify for federal infrastructure assistance. Many argue that subsidies should be reserved for devices capable of downloading and uploading data at a rate of at least 100 megabits per second. You can check spectrum internet rates and packages to learn more about it.

According to a January study by the United States Federal Communications Commission, the cable will transmit at that rate, but uploads averaged just 11 megabits per second in 2019. Carriers who used fiber optic cables averaged 193.

“Why do you want to spend the people’s money on an interim technology?” In an interview, Tom Wheeler, a former Democratic FCC chairman, said. “We can build it in a way that is future-proof – which implies fiber.”

Gaps in Technology

Cable networks with fiber optics will be a part of the answer in the coming years and can be favored to fixed connectivity and satellite-based internet services, Wheeler added.

At stake are theoretically billions of dollars earmarked for closing infrastructure vulnerabilities exposed by the pandemic, which disrupted remote work and education due to patchy internet speeds and connectivity. Proposals that demand high minimum rates have now ignited a vigorous discussion in Congress, notwithstanding the fact that investing in broadband is one of President Joe Biden’s least contentious technology priorities.

The White House has not defined the pace at which it desires. On March 31, the administration announced its “American Jobs Plan,” calling for the provision of “affordable, secure, high-speed internet to any American.” It cited rural areas without broadband and metropolitan areas where some residents avoid broadband due to high costs. It stated unequivocally that “Americans pay so much for the internet” and vowed to fight for lower rates. However, spectrum internet is providing many opportunities to make an affordable choice.

Congress can eventually determine whether or not to condition help on increased speeds. Four lawmakers, including two Republicans, an independent, and West Virginia Democrat Joe Manchin, wrote to Biden administration officials earlier this year in favor of a 100/100 minimum.

“There is no reason federal funding to rural areas should not support the type of speeds used by households in typical well-served urban and suburban areas,” the senators wrote in their March 4 message.

Republicans, however, also expressed resistance to the proposal, including Ohio Representative Bill Johnson, who said that it might result in support for regions that already have connectivity as rural areas wait. “That sounds like the exact opposite of what needs to happen,” he said during a March 22 hearing.

On Thursday, Congress renewed its focus on broadband with a House hearing on unequal access to infrastructure.

The term ‘Digital Divide.’

“There is a digital divide between races and ethnicities,” Democratic Representative Frank Pallone of New Jersey, chairman of the Energy and Commerce Committee, said during his panel’s hearing. “While 80% of White households have broadband access, that is true of only 70% of Black households and 65% of Hispanic households.”

Representative Cathy McMorris Rodgers, a Republican from Washington, blasted Democratic plans for establishing “arbitrary speed thresholds that favor fiber-only projects with no restrictions to prevent overbuilding in areas where broadband already exists.”

Cable companies and other ISPs such as spectrum internet argue that requiring extremely rapid uploads makes little sense, given that the majority of home broadband traffic consists of video files, which often reach 100 megabits. Rather than subsidizing additional ultra-fast networks in regions already covered by cable systems, they say the government could prioritize underserved areas.

Federal funds can be directed toward areas of “no broadband, or very little broadband, or really inadequate broadband,” Michael Powell, president of the trade organization NCTA-The Internet & Television Association, said last month on the C-Span network show “The Communicators.” Comcast, the largest cable network, and Charter, the second-largest, are part of the association.

Divide in the Digital Age into Broadband Types

The upload speed of the internet varies according to the form of the service provider. The Federal Communications Commission’s new broadband benchmark is 25/3 — 25 megabits per second for downloads and 3 megabits per second for uploads. According to the FCC, almost 20 million Americans lack access to such a service.

If the 100/100 standard is used to determine which regions qualify for federal broadband incentives, federal funding for broadband development could flow to areas with quick downloads but slow uploads. Funds may be used to subsidize rivalry in areas served by existing cable companies such as Comcast and Charter. Spectrum internet is so far offering the best broadband packages and deals.

According to a Democratic bill introduced in March that could serve as the foundation for future infrastructure legislation, that would occur only after funds are directed to areas with no broadband or minimal coverage.

Comcast and Charter stock all fell in the days following the announcement of Biden’s proposal but have since regained that ground and more after each firm posted profits. Comcast reported the addition of 461,000 cable customers in the first quarter, while Charter announced the addition of 355,000 internet users, beyond analysts’ estimates.

Complaints from Consumers

Neither organization discloses publicly how many of its customers receive service through fiber to the home. According to Cowen & Co. report, approximately 16% of cable customers are linked by fiber optic cables. According to Jon Peha, an engineering professor at Pittsburgh’s Carnegie Mellon University, concerns regarding upload rates increased significantly during the pandemic.

“Upstream is critical if you’re working or taking classes from home,” Peha wrote in an interview. “We found that after the pandemic hit, downstream speed stayed about the same but upstream speed was significantly degraded, and consumer complaints about speed tripled.”

Republican FCC Commissioner Brendan Carr said the new quicker norm might have unintended consequences, with funds flooding through already-wired towns. “You’re going to dump taxpayer money on top of that seriously?” Carr said in a telephone interview. “When we have many areas with zero connections, that seems like a mistake.”

According to Gigi Sohn, the 100/100 mandate is a longtime Democratic FCC aide who is now a distinguished fellow at Georgetown Law’s Georgetown Law Institute for Technology Law & Policy. “It incentivizes them to up their game,” Sohn said in an interview. “You’re seeing that with Charter, Comcast, and Altice — the three biggest cable operators.”

Fiber Optic Cable

Comcast President David Watson informed analysts on April 29 that symmetric coverage — the same rates up and down — is a business priority. In February, the Charter and spectrum internet announced that it would invest $5 billion in a national fiber-optic network to service mostly remote communities as part of a Federal Communications Commission subsidy initiative. Altice USA Inc. Chief Executive Officer Dexter Goei informed investors on April 28 that the firm has reached 1 million fiber-to-the-home connections and is expanding.

“Customers increasingly appreciate higher upload speeds,” Goei said.

The campaign for faster speeds comes from a White House where cable opponents hold prominent policy positions. Bharat Ramamurti, Deputy Director of the National Economic Council, headed a Democratic Senator Elizabeth Warren team that blamed Comcast for being a “market-dominant” organization.

Tim Wu, a special assistant, has long argued that cable premiums are excessive. He assisted New York in assembling a case accusing Charter of defrauding consumers by promising quicker broadband rates than the firm felt it could achieve. Charter decided to dismiss the allegations for $174 million. Also, Vice President Kamala Harris, whom Biden has requested to head the broadband initiative, oversaw Comcast lawsuits during her tenure as California’s attorney general.

“The administration might view the infrastructure bill as a once-in-a-lifetime opportunity to build competition in that market,” Paul Gallant, a Cowen & Co. analyst based in Washington, said in an interview. “Is this a paradigm shift?”

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