Broadband provides Internet connectivity at various  speeds. Fixed service can also be provided by non-wired means, such  as via satellites. The process of gaining access to such  infrastructure or installing wires or cable can require permits from local or  other government entities or utility companies. Figure 1 illustrates several  different types of fixed services through which consumers can access  broadband. 2). Selected Experts and Stakeholders Said Costs Can Limit Broadband Competition and Cited Industry Consolidation and Similarity of Fixed and Mobile Service as Emerging Factors

		Experts and Stakeholders Identified High Costs of Infrastructure, Spectrum, and Video Content as Limiting Competition

Experts and stakeholders told us that access and associated costs  related to infrastructure, spectrum, and video content are barriers to entry  in the broadband market. Competition may increase  in such a scenario because increasing similarity could result in the two  services becoming substitutes, and therefore lead to fixed providers  facing competitive pressure from mobile providers. FCC Has Undertaken Rulemakings and Other Actions to Promote Competition but Lacks Information on Their Effectiveness and Competition’s Effect on Consumers

		FCC Has Used Rulemakings, Spectrum Auctions, and Merger Reviews to Promote Competition but Lacks Information on the Effectiveness of These Actions

FCC has used its rulemaking process and other actions to develop  regulations and rules intended to reduce costs and delays associated with  deploying broadband infrastructure, for example:  In 2014, FCC issued new regulations that, among other things, aimed  to quicken environmental and historic reviews related to deployment  of wireless infrastructure and clarify FCC’s timelines for states and  municipalities to complete review of wireless applications. As discussed above, about half of Americans have  access to only one fixed broadband provider, and although most  Americans have access to multiple choices for mobile broadband service,  FCC and experts acknowledge that fixed and mobile service are not fully  substitutable for one another. FCC Assesses Some Indicators of Consumers’ Broadband Service Experience but Lacks Information on How Competition Affects Service Price and Quality

FCC has reported that competition can help consumers get lower prices  and higher service quality from their broadband providers; however, the  agency has not identified an approach to regularly examine how  competition affects broadband prices and service quality. This  report shows that the number of broadband providers varies considerably  depending on where a consumer is located, with urban areas generally  having more provider options than rural areas. FCC’s data and reports, as discussed, provide information on the extent  of broadband deployment and other indicators of consumer experience  with broadband service, but these data and reports do not show how  broadband prices and service quality vary based on the number of  choices that consumers have for broadband service. Moving forward, FCC could take steps to better  understand how well its actions to promote broadband competition are  working. Such information could help FCC and other decision  makers better prioritize and focus FCC’s various efforts to promote  broadband competition to secure lower prices and higher quality service  for consumers in a rapidly evolving market. (Recommendation 1)
As part of its annual reporting on the broadband market, FCC should  solicit and report on the views of stakeholders and others on how  varying levels of broadband deployment affect broadband prices and  service quality. How can industry support competitive broadband markets? What is the appropriate role, if any, for the Federal Communications  Commission (FCC) with regard to broadband competition? Appendix II: Objectives, Scope, and Methodology

This report covers (1) selected experts’ and stakeholders’ views on the  factors currently affecting broadband competition and the factors that may  affect it in the future and (2) the actions FCC has taken to promote  broadband competition and assess the effectiveness of its actions, as  well as to examine consumers’ experience with broadband competition. To obtain expert and stakeholder views on factors that affect competition  in broadband, we convened a meeting of 19 experts and interviewed 23  stakeholders.
Why GAO Did This Study

FCC has a role in promoting competition in the market for broadband, which provides consumers with high-speed Internet through fixed service at home and mobile service through devices such as smartphones. FCC data indicate that about 90 percent of Americans had access to fixed service as of December 2015, but that less than half had more than one choice for such service. As of that time, FCC reported that multiple providers offered mobile broadband coverage to most Americans. Mobile service increasingly allows access to Internet content that was previously accessed primarily through fixed service.
GAO was asked to examine factors affecting broadband competition. This report covers (1) selected experts' and stakeholders' views on factors affecting broadband competition and (2) how FCC promotes broadband competition and examines consumers' experience with it. GAO analyzed FCC data as of December 2015; reviewed relevant statutes and FCC documentation; interviewed FCC officials and 23 stakeholders selected to include various types of broadband providers and associations representing industry and consumers; and convened a meeting of 19 experts from academia, industry, and consumer groups with assistance from the National Academy of Sciences.

What GAO Found

Selected experts and stakeholders told GAO that infrastructure costs and other factors can limit broadband deployment and the extent of broadband competition. Factors these individuals identified included providers' costs to deploy antennas, install wires or cables, and obtain permits to access existing infrastructure. Such infrastructure includes utility poles needed for deploying wired components of broadband networks. These costs can limit competition, particularly in non-urban and less populated areas, where providers' return on investment can be lower due to fewer potential customers. Experts and stakeholders also identified industry consolidation and increasing similarity of fixed and mobile broadband as factors that are likely to affect broadband competition moving forward.
The Federal Communications Commission (FCC) has undertaken rulemakings, spectrum auctions, and merger reviews to help promote competition, but lacks information on how well these actions promote competition. Despite such actions, about half of Americans have access to only one fixed provider (see figure). FCC has a process for seeking stakeholders' and others' input on broadband-related topics and annually reporting on these views, but does not solicit such input on its actions to promote competition. Such input could help FCC determine if any changes are needed to its actions to support competition relative to current and emerging factors in the broadband market. Further, FCC's annual reports contain some information on consumers' experience with broadband competition, such as the number of provider options. However, these reports do not include stakeholder input on how the number of provider options affects prices and service. Some stakeholders said that competition was important to securing lower prices and better service, while others said competition does not necessarily lead to these benefits because some providers offer the same pricing and service quality everywhere regardless of whether they face competition in a particular location. Regularly seeking stakeholder input on how varying levels of broadband deployment affect price and service quality, could help FCC to better focus its efforts to secure lower prices and higher service quality service for consumers.

What GAO Recommends

FCC should annually solicit and report on stakeholder input regarding (1) its actions to promote broadband competition and (2) how varying levels of broadband deployment affect prices and service quality. FCC concurred with GAO's recommendations.