FCC and GAO Studies Released About Small Business Broadband Needs

NEWS ITEM

FCC and GAO Studies Released About Small Business Broadband Needs

The broadband needs of small businesses are rapidly changing. Meeting their needs is essential, given the important role that small businesses play in the U.S. economy by creating jobs and promoting economic opportunity. The COVID-19 pandemic has created many social and business disruptions that have forced more small businesses to conduct their business online. Broadband is a critical tool for their economic survival. The Federal Communications Commission (FCC) and Government Accountability Office (GAO) released two studies about U.S. Broadband in July 2021.

FCC STUDY

In its July 2021 broadband deployment report, the FCC concluded that the 2015 broadband speed benchmark does continue to meet the current requirements for reasonable and timely deployment of broadband services to all Americans. However, FCC representatives acknowledged that rapidly changing small business requirements had not been taken into consideration when making that initial determination. The FCC found that 96% of the U.S. population has access to broadband, defined as an “always on” internet connection operating at or above the FCC’s benchmark for minimum speed, which was set in 2015 at 25 megabits per second (Mbps) for downloads and 3 Mbps for uploads. The FCC has prioritized closing the rural/urban digital divide by promoting competition in the telecommunications marketplace and removing barriers to infrastructure investment. The FCC concluded that fixed and mobile providers continue to make gains in bringing highspeed broadband service to all Americans. The number of Americans living in areas without access to at least 25/3 Mbps has dropped from to fewer than 14.5 million Americans at the end of 2019, and more than threequarters of those in newly served areas, nearly 3.7 million, are located in rural areas, bringing the number of rural Americans in areas served by at least 25/3 Mbps to nearly 83%. As of the end of 2019, mobile providers now provide access to 5G capability to approximately 60% of Americans. Mobile broadband deployment benefited from more than $29 billion of capital expenditures in 2019 (roughly 18% of global mobile capital spending), the largest mobile broadband investment since 2015. The FCC concluded that advanced telecommunications capability is being deployed on a reasonable and timely basis, nevertheless, efforts to close the digital divide are not complete.

GAO STUDY

The GAO’s July 2021 study of broadband concluded that FCC’s estimate of effective access may be overstated, especially with regard to rural areas, and that questions remained whether current broadband services are fast enough to meet the evolving needs of small business owners in particular. GAO cited two recent surveys by the National Federation of Independent Business and Google, which found that approximately 8 percent, or about 2-3 million, U.S. small business lack access to broadband. Small businesses likely benefit from the FCC and the Department of Agriculture’s (USDA) funding to expand broadband deployment. For example, FCC estimated that approximately $9.2 billion allocated for broadband infrastructure in 2020 will serve over 5.2 million residences and businesses. Much of the literature GAO reviewed suggests that FCC’s current broadband minimum benchmark speeds of 25 megabits per second (Mbps) for downloading and 3 Mbps for uploading are likely too slow to meet many small business needs. Sources vary in terms of the specific recommendations for small businesses. For example, in 2017, BroadbandUSA—a National Telecommunications and Information Administration program—published a fact sheet stating that small businesses need a minimum of 50 Mbps speeds in order to conduct tasks such as managing inventory, operating point-of-sale terminals, and coordinating shipping. A 2019 USDA report on rural

broadband and agriculture stated that, as technology advances and volumes of data needed to manage agriculture production grow, speeds in excess of 25/3 Mbps with more equal download and upload speeds will likely be necessary. GAO noted that FCC was required to fulfill a statutory requirement to determine annually whether advanced telecommunications capability is being deployed on a reasonable and timely basis to all Americans, FCC sets a minimum broadband speed benchmark. In its 2021 Broadband Deployment Report, FCC stated that the current benchmark, last set in 2015, continues to meet that requirement. However, FCC officials said they are not aware of any small business requirements that have been taken into consideration in determining the minimum speed benchmark. GAO concluded that analyzing small business speed requirements could help inform FCC’s determination of the benchmark speed for broadband. The FCC agreed with GAO’s recommendation that the FCC solicit greater stakeholder input for analysis and incorporate the results of that analysis into the FCC’s benchmark for broadband. Complete copies of the two reports are available at the website links cited below.

SOURCES

Assessing Small Business Broadband Needs, IEEE-USA Insight, Jul. 19, 2021, https://insight.ieeeusa.org/articles/ assessing-small-business-broadband-needs/. Broadband: FCC Should Analyze Small Business Speed Needs, Report to the Congressional Addressees, United States Government Accountability Office, July 2021, https://www.gao.gov/assets/gao-21-494.pdf. Fourteenth Broadband Deployment Report, Adopted: Jan. 13, 2021 Released: Jan. 19, 2021, Federal Communications Commission, FCC 21-18, https://docs.fcc. gov/public/attachments/FCC-21-18A1.pdf.

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