On December 30, 2022, the FCC released the 2022 Communications Marketplace Report (“the Report”). The RAY BAUM Act requires the FCC to provide a comprehensive evaluation of competition in the communications marketplace. The FCC issues this Report every two years to satisfy this requirement and analyzes the state of competition in the United States, actions taken by the FCC to address challenges and opportunities in the communications market, and the FCC’s agenda to continue to address challenges and opportunities in the communications market. The FCC notes that it has relied upon FCC Form 477 data for this report, as the Broadband Data Collection (“BDC”) data is still in its early stages, but expects that future reports will rely on BDC data.
The Report finds as follows:
- The Mobile Wireless Marketplace:
- State of Competition: Service connections have grown by 4-6% since 2019. Total network annual data usage increased by approximately 26% from 2020 to 2021 and the monthly data usage per smartphone subscriber rose to an average of 12.1 GB per subscriber per month, an approximately 12% increase. The Report approximates that there were 418,887 cell sites in commercial use at year end 2021, up from 417,215 in 2020, and 349,344 in 2018, and that 80% of future wireless infrastructure deployments will be in the form of small cells. The overall price for wireless services increased in 2020 for the first time since 2009 by 2% and again in 2021 by 1.7%, but the overall price per unit decreased by approximately 3%. The Report estimates that wireless providers invested nearly $147 billion in their networks in the past five years. 5G coverage has grown since the last report, and providers have increased the number of Americans to whom they provide 5G service. The Report notes that the need for 5G services will continue to increase as IOT, AI, Smart Cities, edge computing, and other advanced services become more prevalent. The Report also finds that device unlocking, eSIM technology, and other similar developments have been beneficial to consumers.
- Deployment: Median LTE download speed increased from 11.0 Mbps to 30.4 Mbps, an increase of approximately 176%, from 2014 to 2022. As of December 2021, over 94% of the U.S. population lived in areas with 4G LTE coverage by at least three service providers. Median 5G speeds increased from 2020 to 2021, though the amount of the increase varied by provider. Approximately 98% of the population, 77% of road miles, and 55% of square miles were covered by at least one 5G service provider.
- Entry and Expansion into the Marketplace: As of July 2022, AT&T, T-Mobile, and Verizon collectively held approximately 78% of all spectrum included in the spectrum screen. Despite these holdings, the Report notes that the Commission took several steps to increase the spectrum availability for all providers through a number of auctions. The Report also notes that the FCC adopted several Orders to attempt to reduce the costs of deployment since the last Report. The Report notes that the FCC’s ability to continue to make spectrum available is limited by Congress, but that if the auction authority is extended it will examine existing spectrum and licenses for auction.
- Agenda: Pending future provision of auction authority, the Commission intends to examine for potential re-auction its inventory of licenses in services well-suited for 5G that were previously offered at auction. The Report recognizes that supporting the deployment of 5G and other next-generation wireless services through smart infrastructure policy is critical, and notes the Commission will continue to evaluate ways to help facilitate wireless infrastructure investment and deployment.
- Fixed Broadband Services Marketplace:
- State of Competition: Form 477 data suggests that 82.9 million households have access to broadband capable of meeting download speeds of 100 Mbps, an increases of approximately 25% from 2020. The data further suggests that 64% of households have at least two providers offering speeds of 100/20 Mbps and 4% of households have at least two providers offering speeds of 940/500 Mbps. As of December 2021, approximately 62% of fixed residential connections were cable, 21% were fiber-to-the-premises, 13% were copper-based, and the remaining 4% were split between satellite, terrestrial fixed wireless, and other technologies. While subscription rates for cable, fiber, and terrestrial fixed wireless increased since the last report, subscription rates for copper and satellite services fell since the last report. Overall, the adoption rates for faster speeds have increased across the board, with nearly 80% of Americans having adopted speeds of at least 25/3 Mbps, and 33% of Americans having adopted speeds of 100/20 Mbps. The median cost of high-speed internet was found to be $74.99 per month, with half of US households paying between $60 and $90 per month. In general, prices increase with speeds.
- Deployment: Nearly 70% of Americans have access to at least three providers providing speeds of 25/3 Mbps, and nearly 22% have access to at least three providers providing 100/20 Mbps. Only 1.6% of Americans are without access to a provider providing speeds of at least 25/3 Mbps, and only 5.4% of Americans are without access to a provider providing speeds of 100/20 Mbps. 41% of Americans have access to at least one provider offering speeds of 940/500 Mbps. Gaps between rural and urban areas have continued to shrink.
- Entry and Expansion in the Marketplace: The Report notes that there are regulatory and non-regulatory barriers to entry. Regulatory barriers include pole attachments, access to multi-tenant environments and rights of way. There are also political barriers, increases in cost and difficult economic conditions, and regulatory delays that prevent swift deployments and entry into the market. The FCC notes it has taken action to alleviate many of these issues and that it will continue to promote expansion via the USF programs, Lifeline, the Affordable Connectivity Programs, and Rural Healthcare Programs.
- Agenda: The Commission recognizes that the federal USF programs are key components of the efforts to connect Americans to affordable high-speed broadband, and will consider and evaluate such programs. In addition, given the recent federal funding made available for broadband buildout, the FCC anticipates that it will be necessary to evaluate the funding needs of existing and future providers that have already deployed high-speed broadband networks and to consider the creation of new support processes. The FCC also expects to evaluate its rules pertaining to communications services for incarcerated people.
- Satellite Services:
- State of Competition: The Report notes that satellite services are utilized to provide TV, radio, broadband, mobile, and other consumer services. While certain sectors of the satellite industry, such as satellite TV, managed services, and transponder arrangements, have declined recently in size, other sectors are growing in size and importance, specifically satellite radio, satellite broadband, mobile, and remote sensing. The biggest change is the drop in satellite TV revenues, by a total of $8.5 billion or 22% from 2013 to 2021. Meanwhile, there has been a significant increase in the annual revenues of satellite radio (74%), satellite broadband (75%), mobile services (100%), and remote sensing services (117%) over this time period. The Report notes that there’s greater consumer convenience for satellite services, but that there’s greater time and risk involved in deployments.
- Entry and Expansion into the Marketplace: The Report finds that technological innovation will likely result in an increase in the number of satellites and types of operations in orbit. The Report notes that the FCC has issued a Notice of Inquiry to examine sustained economic activity in space and that it is reorganizing the Commission to support the needs of this growing industry.
- Agenda: The Commission plans further revisions to its orbital debris mitigation requirement and plans to address maneuverability, accidental explosion risk and collision risks associated with larger constellations. There are also several pending proposals and inquires aimed at promoting competition and making it easier for new competitors to enter the satellite market. The Report also recognizes the forthcoming plan to reorganize the Commission’s International Bureau into a new Space Bureau and a standalone Office of International Affairs.
- Voice Telephone Services:
- State of Competition: As of December 2021, residential fixed voice connections were about 28% switched access and 72% interconnected VoIP, with residential switched access connections comprising only 12.2% of all fixed retail voice connections. Most recent FCC Form 477 data show that there are 29 million end-user switched access lines, including 11.9 million residential lines, and 68 million interconnected VoIP subscriptions, including 31 million residential subscriptions. The number of fixed retail switched-access lines declined at an annual rate of 12.3% while VoIP subscriptions increased at a rate of 0.7%. Data suggests that approximately 68.7% of households were mobile-only in late 2021.
- Other: The FCC notes that it took steps to increase connectivity in response to the COVID 19 pandemic, including the Keep Americans Connected initiative, the telehealth program, providing regulatory flexibility for ETCs, rural healthcare, and e-rate programs, among other actions.
Commissioner Carr released a statement approving in part and concurring in part.
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