Broadband markets in the United States are by and large competitive today, and the trends indicate that competition is becoming more widespread. Federal Communications Commission (FCC or Commission) data show that the share of U.S. households that have access to multiple providers of fast broadband is already very large and is increasing rapidly. Based simply on projecting historic trends, we estimate that by December 2025, well over 90% of households will have access to at least one broadband provider offering 100/20+ service and at least one additional provider offering 25/3+ service.3 We also project that approximately 74% of all households will have access to at least two broadband providers both offering 100/20+ service. Furthermore, these projections based solely on extrapolating historic trends are likely conservative, given the announced plans of most major incumbent telecommunications providers to dramatically accelerate the pace of their investments in fiber-to-the-premises (fiber) infrastructure over the next five years. Taking these already-announced plans for accelerated investments in fiber into account, we project that approximately 84% of all households will have access to at least two providers both offering 100/20+ service by December 2025. Therefore, the potential benefits of greater regulation (lower prices and faster speeds in areas without sufficient competition) would be limited, while the harms of such regulation (reduced investment incentives, reduced efficiency incentives, reduced innovation and reduced experimentation with new business models) would be felt throughout the entire United States.
There are several reasons not to apply common-carrier-style regulation to smaller broadband providers, even if such regulation were to be imposed on larger providers. First, smaller providers, many of which are family businesses, cooperatives or municipal entities, simply do not have the financial sophistication and administrative capability to comply with a complex set of new regulatory requirements and procedures without incurring significant additional costs. Customers of these firms will ultimately bear a substantial fraction of these cost increases. Moreover, if common-carrier-style regulation were applied only to larger providers, regulatory pressure would still be placed on smaller providers to the extent that they serve an area that is also served by a larger provider and thus would have to compete for customers with the larger regulated provider. Approximately 97% of U.S. households are in areas served by at least one larger broadband provider. Furthermore, many of the remaining 3% of households are located in areas where there are at least two smaller providers already offering service at 100/20+ (and are thus already protected by competition) or in areas where there is currently a provider of broadband service receiving FCC high-cost subsidy support (that is already subject to regulatory oversight because it is subsidized). Thus, the share of households that would potentially benefit from extending additional regulation to smaller providers is very small and will decrease further.