GAO says FCC's speed standard likely too slow for small businesses

A new report from the US Government Accountability Office (GAO) makes the case that the broadband speed standard of 25Mbit/s download and 3Mbit/s upload is insufficient.

The report specifically examines the FCC's speed definition with respect to small businesses – of which there are approximately 32 million in the US – calling their success "essential to economic growth by creating jobs and promoting economic opportunity."

Citing interviews with various sources – including federal and local officials, small businesses, broadband providers, trade organizations and policy experts – the GAO says data suggests the "current broadband minimum benchmark speeds … are likely too slow to meet many small business speed needs."

The report also refers to studies from Google and Research Now, as well as Amazon and US Chamber Technology Engagement Center, showing that over 8% of small businesses (or 2-3 million) report having problems due to inadequate Internet access. Another study from National Federation of Independent Business (NFIB) showed that 20% of rural small businesses do not use broadband and 5% still use dialup Internet.

GAO also incorporates examples from small businesses, including a California vineyard owner whose only broadband option is satellite. According to GAO, "while she subscribes to the maximum speed available, she is unable to access the internet at FCC's minimum benchmark speed. When she ran a speed test at mid-afternoon in October 2020, it showed her speeds to be approximately 3/5 Mbps. This owner stated that access to broadband is essential for many aspects of her business."

Another small business owner in Minnesota who subscribes to a fixed wireless service said the speeds he gets are "below 25/3 Mbps, and the service is not sufficient for his business purposes, which include editing and uploading marketing videos.

"The only other available internet service is a slower dial-up option provided by the local telephone company. He stated that one of his neighbors, who also operates a small business from home, is considering moving for better broadband access," GAO writes.

While the GAO does not put forth a suggestion for a new standard, it says it is "making one recommendation to FCC to solicit stakeholder input and analyze small business broadband speed needs and incorporate the results of this analysis into the benchmark for broadband." It further adds that the "FCC agreed with this recommendation."

'25/3 has got to die'

GAO is only the latest entity to suggest that the broadband speed standard – set in 2015 under former FCC Chairman Ajit Pai – is holding the US back from addressing its digital divide problem.

Two FCC-commissioned reports in 2020, from the agency's Broadband Deployment Advisory Council and Precision Agriculture Connectivity Task Force, recommended increasing the minimum standard.

Other industry stakeholders have been sounding the alarm as well.

"That 25/3 standard has got to die, it needs to go away. It is not serving my rural ranchers, my rural farmers and the kids that live in those communities," said Teresa Ferguson, director of federal broadband engagement at Colorado's broadband office, on a panel hosted by Pew.

In a recent congressional hearing, Dan Sullivan, president of Downeast Broadband Utility, a municipal fiber provider in Maine, called the federal broadband description "completely inaccurate."

"That is not broadband by any stretch of the imagination," he said.

The GAO report hammers home why this matters: If 25/3 isn't broadband "by any stretch of the imagination," then the number of people who lack Internet access in this country is technically much larger, by a factor of millions, than current estimates suggest.

"Were FCC to raise the benchmark from 25/3 to 100/10, its reporting would show that 67 percent of the rural population has broadband access, instead of 83 percent," writes GAO in its report. "Although this would not mean that broadband speeds had changed, it could demonstrate a need for further investment and/or network upgrades to make sure that access is keeping pace with increasing speed needs."

In addition to the outdated speed standard, the FCC's view of the digital divide is further clouded by its flawed mapping. A study by BroadbandNow found that the digital divide is three-times larger than the FCC claims, with 42 million Americans lacking broadband, compared to the FCC's most recent finding of just 14.5 million.

With $65 billion for broadband making its way through Congress to help communities and service providers finally tackle the digital divide, addressing these problems and determining an accurate distinction between served and unserved is all the more crucial.

Related posts:

• Details on bipartisan broadband bill to be finalized this week
• US broadband gap is three times larger than FCC says – study
• BBWN Bites: Speed standard 'useless, harmful,' says EFF to FCC

— Nicole Ferraro, contributing editor and host of "The Divide" and "What's the Story?" Light Reading