BROADBAND

Additional 

Stakeholder Input 

Could Inform FCC 

Actions to Promote 

Competition

Report to the Chairman, Committee on 

Commerce, Science, and 

Transportation, U.S. Senate

September 2017

GAO-17-742

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-17-742, a report to the 

Chairman, Committee on Commerce, Science, 

and Transportation, U.S. Senate

September 2017

BROADBAND

Additional Stakeholder Input Could Inform FCC 

Actions to Promote Competition

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.

Fixed Broadband Providers Reporting Download Speeds of at Least 25 Megabits 

per Second, as of December 2015, by Percentage of U.S. Population, as of 2010

Note: Analysis combines FCC broadband deployment data from providers reporting at least 25 megabits per second 

download speeds and 3 megabits per second upload speeds, as of December 2015, with population data from the 

2010 U.S. Decennial Census, which is the most recent nation-wide population count available.

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. 

View GAO-17-742. For more information, 

contact Mark Goldstein at (202) 512-2834 or 

goldsteinm@gao.gov.

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 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.
Page i GAO-17-742 Broadband

Letter 1

Background 4

Selected Experts and Stakeholders Said Costs Can Limit 

Broadband Competition and Cited Industry Consolidation and 

Similarity of Fixed and Mobile Service as Emerging Factors 9

FCC Has Undertaken Rulemakings and Other Actions to Promote 

Competition but Lacks Information on Their Effectiveness and 

Competition’s Effect on Consumers 17

Conclusions 25

Recommendations 26

Agency Comments 26

Appendix I List of Experts and Discussion Questions 28

Appendix II Objectives, Scope, and Methodology 30

Appendix III Comments from the Federal Communications Commission 34

Appendix IV GAO Contact and Staff Acknowledgments 36

Figures

Figure 1: Key Components of Fixed Broadband Service 6

Figure 2: Fixed Broadband Providers Reporting Download Speeds 

of at Least 25 Megabits per Second, as of December 

2015, by Percentage of U.S. Population, as of 2010 8

Figure 3: Mobile Broadband Providers Reporting Long Term 

Evolution Coverage, as of December 2015, by 

Percentage of U.S. Population, as of 2010 9

Figure 4: Number of Fixed Broadband Providers in Dallas-Fort 

Worth, Texas Area, by Census Block 11

Figure 5: Illustration of Horizontal and Vertical Mergers 15

Contents
Page ii GAO-17-742 Broadband

Abbreviations

Act The Communications Act of 1934, as amended by the 

Telecommunications Act of 1996

FCC Federal Communications Commission 

5G fifth generation (of wireless technology)

LTE Long Term Evolution

Mbps megabits per second 

NAS National Academy of Sciences

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately.
Page 1 GAO-17-742 Broadband

441 G St. N.W.

Washington, DC 20548

September 19, 2017

The Honorable John Thune

Chairman

Committee on Commerce, Science, and Transportation

United States Senate

Dear Mr. Chairman:

Broadband provides high-speed Internet service, which can improve 

communications and drive economic growth and innovation. In recent 

years, technological advances in broadband have allowed more 

Americans to use mobile service providers to access video and other 

data-heavy content that was previously accessed primarily through fixed 

service providers, such as cable companies.1 In the 2016 Broadband 

Progress Report, the Federal Communications Commission (FCC) 

recognized that fixed and mobile broadband can provide similar 

functionalities in certain circumstances, including some video access.2 As 

of December 2015, FCC data indicated that about 90 percent of the U.S. 

population had access to fixed broadband, but that only about 40 percent 

of the population had more than one choice for fixed service.3 As of 

December 2015, FCC reported that almost all of the population was 

covered by the mobile industry’s standard for broadband—Long Term 

 1

Fixed service provides Internet access to one location, such as a consumer’s home, via 

fiber-optic cable, coaxial cable, digital subscriber line, or satellite, among others. In 

contrast, mobile service provides Internet access anywhere a user can connect to a 

wireless network with a mobile device, such as a smartphone. 

2

Inquiry Concerning the Deployment of Advanced Telecommunications Capability to All 

Americans in a Reasonable and Timely Fashion, and Possible Steps to Accelerate Such 

Deployment Pursuant to Section 706 of the Telecommunications Act of 1996, as 

Amended by the Broadband Data Improvement Act, 2016 Broadband Progress Report, 31 

FCC Rcd 699 (2016). 

3

Analysis combines FCC broadband deployment data from providers reporting at least 25 

megabits per second download speeds and 3 megabits per second upload speeds, as of 

December 2015, with population data from the 2010 U.S. Decennial Census, which is the 

most recent nation-wide population count available.

Letter
Page 2 GAO-17-742 Broadband

Evolution (LTE)—and that nearly 90 percent of the population lived in 

areas with LTE coverage by at least four mobile providers.4

In 1996, the Telecommunications Act amended the Communications Act 

(hereafter the “Act”) with a stated purpose of securing lower prices and 

higher-quality services for consumers and encouraging the rapid 

deployment of new telecommunications technologies through FCC action 

to promote competition and reduce regulation.5 Specifically, the Act 

requires FCC to annually assess whether advanced telecommunications 

capability—a term that encompasses “broadband”6

—is being deployed to 

all Americans in a reasonable and timely fashion.7 Further, the Act 

requires FCC to promote competition and remove barriers to 

infrastructure investment where FCC’s assessment concludes that 

deployment of advanced telecommunications capability is not reasonable 

and timely.8

We have previously reported on FCC efforts related to broadband 

service. In 2014, we examined FCC efforts to increase broadband 

deployment in unserved areas and identified challenges to doing this, 

such as low returns on investment for broadband providers in those 

areas.9 In 2015, we reviewed federal efforts to encourage consumers to 

adopt broadband service and recommended that FCC revise its strategic 

plan to more clearly state if broadband adoption is a priority, and if so, 

 4

FCC, 19th Mobile Wireless Competition Report, Chart III. A.2. (Washington, D.C.: Sept. 

23, 2016). FCC estimated mobile broadband coverage on the basis of LTE coverage. 

According to FCC, LTE deployment does not necessarily result in specific guaranteed 

speeds for consumers or necessarily reflect the number of service providers from which a 

consumer in a given area may choose. Currently, LTE is the industry-wide mobile 

broadband standard and refers to a suite of advanced telecommunications processes, 

practices, and technologies that are available to consumers. 

5

Communications Act of 1934, Pub. L. No. 73-416, 48 Stat. 1064 (1934), as amended by 

Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996) (codified as 

amended at 47 U.S.C. § 151).

6

31 FCC Rcd 699 (2016).

7

47 U.S.C. § 1302(b). 

8

47 U.S.C. §§ 1302(a), (b). 

9

GAO, Telecommunications: Projects and Policies Related to Deploying Broadband in 

Unserved and Underserved Areas, GAO-14-409 (Washington, D.C.: Apr. 23, 2014).
Page 3 GAO-17-742 Broadband

what outcomes FCC intends to achieve.10 In 2015, we also reviewed 

FCC’s efforts to inform consumers about how to obtain information on the 

performance of their broadband service and recommended that FCC 

evaluate its performance with these efforts.11

You asked us to provide information on the state of competition in 

broadband and federal efforts related to broadband competition. This 

report covers (1) views of selected experts and stakeholders on the 

factors currently affecting broadband competition and 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 address these objectives, we analyzed FCC data on broadband 

deployment as of December 2015;12 reviewed relevant statutes, literature, 

and FCC documentation, including regulations; interviewed FCC officials 

and stakeholders from 23 entities, including broadband providers, 

associations representing providers and utilities, financial services firms, 

and consumer advocacy groups; and convened a meeting of 19 experts 

from academia, industry, and consumer groups. We selected 

stakeholders based on a review of relevant broadband industry literature 

and stakeholders’ recommendations. We selected broadband providers to 

include companies that offer broadband via a variety of methods, such as 

satellite, fiber-optic cable, and coaxial cable, among others.13 We 

identified experts and convened a meeting of these experts with 

 10GAO, Broadband: Intended Outcomes and Effectiveness of Efforts to Address Adoption 

Barriers Are Unclear, GAO-15-473 (Washington, D.C.: June 2, 2015). In 2016, we 

confirmed that FCC revised its strategic plan to more clearly indicate the commission’s 

goals for addressing broadband adoption barriers and what outcomes it expects to 

achieve through its efforts.

11GAO, Broadband Performance: Additional Actions Could Help FCC Evaluate Its Efforts 

to Inform Consumers, GAO-15-363 (Washington, D.C.: Apr. 17, 2015). These 

recommendations remain open.

12FCC data for fixed broadband deployment as of June 2016 were available at the time of 

our review. For the purposes of comparing fixed and mobile broadband deployment, we 

used data available as of December 2015—the latest data available for both types of 

services. 

13The specific type of wire or cable a provider deploys depends on the type of Internet 

service a provider offers. Cable companies use coaxial cable, while telecommunications 

companies may provide Internet access through traditional copper telephone wires for 

digital-subscriber-line service or through fiber-optic cables, which convert electrical signals 

carrying data into light and send the light through glass fibers.
Page 4 GAO-17-742 Broadband

assistance from the National Academy of Sciences. The meeting was 

held in February 2017 for one-and-a-half days of discussion on topics 

related to broadband competition. The meeting was recorded and 

transcribed to ensure that we accurately captured the experts’

statements. We analyzed the transcripts to identify key statements the 

experts made regarding factors that currently affect broadband 

competition or that may do so in the future.

With respect to experts and stakeholders, because we asked for their 

opinions and did not conduct a survey in which every expert and 

stakeholder could provide a response as to whether a certain issue was 

relevant for them, we do not enumerate responses in the report. Instead, 

we analyzed the responses and reported on common themes that arose 

from our expert meeting and stakeholder interviews.14 A list of the experts 

and questions discussed at our meeting of experts can be found in 

appendix I.

To examine FCC’s efforts to promote broadband competition, we also 

reviewed federal standards for internal control, which provide a 

framework for improving accountability in achieving an entity’s mission.15

Further details about our scope and methodology can be found in 

appendix II.

We conducted this performance audit from June 2016 to September 2017 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

The term “broadband” commonly refers to Internet access that is high 

speed and provides an “always-on” connection, so users do not have to 

reestablish a connection each time they access the Internet. Broadband 

service may be “fixed”—that is, providing service to a single location, 

 14Because we selected a non-generalizable sample of experts and stakeholders to 

discuss the factors that affect broadband competition, the information cannot be used to 

make inferences about a population. 

15GAO, Standards for Internal Control in the Federal Government, GAO-14-704G 

(Washington, D.C.: Sept. 10, 2014). 

Background
Page 5 GAO-17-742 Broadband

such as a customer’s home—or “mobile,” that is, providing service 

wherever a customer has access to a mobile wireless network, including 

while on the move, through a mobile device, such as a smartphone. 

Broadband providers such as cable companies (e.g., Comcast) and 

telecommunications companies (e.g., AT&T) sell broadband services to 

individual consumers. Broadband provides Internet connectivity at various 

speeds.16 In 2016, the FCC reported that fixed services typically provide 

greater speeds than mobile services.17 In 2015, FCC set a benchmark 

speed of 25 megabits per second (Mbps) download and 3 Mbps upload—

”25 Mbps/3 Mbps”—for fixed service to be considered as providing 

Americans with access to advanced telecommunications capability, but 

FCC has not set a similar benchmark for mobile broadband. We use 

FCC’s benchmark speed of 25 Mbps/3 Mbps for purposes of identifying 

whether a fixed Internet service provides broadband. We identify a mobile 

service as broadband if it uses the LTE standard, an industry standard 

that is part of the fourth generation of wireless telecommunications 

technology, which is currently in common use. At present, some mobile 

service providers are testing the fifth generation (5G) of wireless 

technology.

Broadband providers extensively deploy and maintain infrastructure for 

fixed and mobile broadband. Fixed service generally requires that wires 

or cables be installed from infrastructure close to the consumer’s location. 

This process can require attachment to utility poles or installation beneath 

roadways. Fixed service can also be provided by non-wired means, such 

as via satellites.18 This infrastructure connects to service providers’

linkages with the Internet. 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.

 16Speed is the network’s data transfer rate and is expressed in terms of the number of bits 

per second that travel to a user’s device (the download speed) and from a user’s device 

(the upload speed), and is often measured in megabits. 

1731 FCC Rcd 699 (2016). 

18In its 2016 Broadband Progress Report, FCC included satellite-based services in its 

assessment of Americans access to advanced telecommunications capability, but 

concluded that this type of service had not yet reached FCC’s speed benchmark of 25 

Mbps/3 Mbps.
Page 6 GAO-17-742 Broadband

Figure 1: Key Components of Fixed Broadband Service

Mobile service requires the installation of antennas that provide service to 

consumers within a coverage area and may require the construction of a 

tower on which to place the antenna. To install antennas, providers must 

obtain permits from government entities with jurisdiction over an 

antenna’s location or permission from public utilities to deploy antennas 

on utility poles. Like fixed service providers, mobile service providers 

must extensively deploy wires or cables to connect their antennas to the 

Internet—the final connection with the consumer from the antenna is 

wireless. A key difference between mobile and fixed service is that mobile 

service provides connectivity to consumers wherever they are covered by 

service, including while on the move, while fixed service provides 

connectivity to consumers in a static location, such as a home.19 Mobile 

service also requires radio frequency spectrum (spectrum), which mobile 

service providers use to transmit data. 

FCC regulates interstate and international communications, including 

broadband service. It is directed by five commissioners, including one 

who serves as chairman. FCC is tasked with developing and enforcing 

 19Fixed service allows consumers some wireless connectivity when consumers use Wi-Fi, 

which is a technology that allows consumers to access the Internet through a wireless 

connection created by a variety of devices, such as wireless routers. 
Page 7 GAO-17-742 Broadband

regulations; reviewing transactions, such as mergers involving 

telecommunications companies; licensing spectrum to commercial users, 

such as broadband providers; and issuing reports on topics related to 

broadband. FCC’s regulatory authority covers a variety of issues that can 

affect broadband deployment, such as rates that certain utilities can 

charge broadband providers for access to utility poles.20 When FCC 

develops regulations or issues certain reports, it solicits comments and 

input from the public, which can include stakeholders, such as broadband 

providers, consumer advocates, and industry experts. FCC reviews 

mergers and other transactions that involve the transfer of FCC licenses, 

such as for commercial use of spectrum. Before a company may assign 

an FCC license to another company or acquire a company that is already 

holding a license, FCC is required to approve of the merger or other 

transaction.21 FCC is responsible for licensing spectrum for commercial 

use, which it does through auctions in which prospective users can bid for 

the rights to spectrum licenses.

FCC collects data and issues reports on several topics related to 

broadband service. Twice a year, it collects data on broadband 

subscription, deployment, and service quality. It collects data from 

providers on deployment of fixed broadband in census blocks and data on 

mobile broadband coverage in discrete geographic areas. These data 

provide information regarding the number of fixed and mobile broadband 

providers reporting that service is deployed in at least a part of any given 

census block. These data also provide information regarding speed, such 

as the highest upload and download speeds of fixed broadband services 

that a service provider advertises in a census block. FCC also collects 

some fixed broadband price data as part of its annual Urban Rate 

Survey.22 FCC issues reports on broadband-related topics, including its 

annual Broadband Progress reports, Mobile Wireless Competition

reports, and Measuring Broadband America reports.

 20Before broadband providers can offer service to customers, they must string fiber-optic 

cable, coaxial cables, or other wires on utility poles and through underground conduit. The 

rates providers pay for such attachments are determined by one of two formulas 

established pursuant to 47 U.S.C. § 224. 

21The U.S. Department of Justice also reviews mergers and applies different standards 

than FCC. 

22As part of its annual Urban Rate Survey, FCC sets rate benchmarks for voice and 

broadband service to ensure recipients of universal service support charge rates 

reasonably comparable to rates in urban areas.
Page 8 GAO-17-742 Broadband

FCC’s data, as of December 2015, indicate that about 39 percent of the 

population resides in a census block where two or more fixed broadband 

providers report that service is deployed at 25 Mbps / 3 Mbps or higher 

speeds in at least part of the census block (see fig. 2).23 Its data, as of 

December 2015, indicate that approximately 99 percent of the population 

has LTE coverage from at least two mobile broadband providers and that 

approximately 89 percent have LTE coverage from at least four such 

providers (see fig. 3).24

Figure 2: Fixed Broadband Providers Reporting Download Speeds of at Least 25 

Megabits per Second, as of December 2015, by Percentage of U.S. Population, as of 

2010

Note: Analysis combines FCC broadband deployment data from providers reporting at least 25 

megabits per second download speeds and 3 megabits per second upload speeds, as of December 

2015, with population data from the 2010 U.S. Decennial Census, which is the most recent nationwide population count available.

 23Consumers may have access to other fixed Internet service options too slow to be 

considered broadband as defined in this report.

24Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993; 

Annual Report and Analysis of Competitive Market Conditions with Respect to Mobile 

Wireless, Nineteenth Report, 31 FCC Rcd 10534, at 10562, Chart III.A.2 and Chart III.A.3 

(2016).
Page 9 GAO-17-742 Broadband

Figure 3: Mobile Broadband Providers Reporting Long Term Evolution Coverage, as 

of December 2015, by Percentage of U.S. Population, as of 2010

Note: Analysis combined FCC’s broadband deployment data from providers reporting with Long Term 

Evolution (LTE) coverage, as of December 2015, with population data from the 2010 U.S. Decennial 

Census, which is the most recent nation-wide population count available.

Selected Experts and 

Stakeholders Said 

Costs Can Limit 

Broadband 

Competition and 

Cited Industry 

Consolidation and 

Similarity of Fixed 

and Mobile Service 

as Emerging Factors
Page 10 GAO-17-742 Broadband

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. As discussed later, some of these barriers exist 

in areas where FCC has taken actions, such as infrastructure access and 

spectrum licensing.

Experts and stakeholders we spoke to told us that the costs of deploying 

broadband infrastructure are barriers to entry for any potential new 

entrant. These costs can vary by area. For instance, an expert from a 

broadband provider said that the cost of deploying infrastructure is a more 

significant barrier to entry in rural areas than in urban areas. Rural areas 

tend to have conditions such as low population-density or difficult terrain 

that can increase a provider’s cost of deploying and maintaining 

broadband networks. For example, mountains in some rural areas may 

physically block mobile providers’ signals from reaching consumers. 

Furthermore, in rural areas, the cost of deploying broadband 

infrastructure is higher on a per-subscriber basis because rural areas 

have fewer potential subscribers from whom providers can recoup 

expenses than urban areas. According to a representative from a 

broadband association, in an urban area, a fixed provider can run cable to 

an apartment complex that may house hundreds of consumers, whereas 

in some rural areas, the population is too low to support a single fixed 

provider given the need for these providers to install wires or cables to 

each consumer’s property. Consequently, there is often a higher level of 

competition among fixed service providers in urban areas and 

progressively less competition away from these areas. Figure 4 of the 

Dallas-Fort Worth, Texas urban area illustrates an example of more 

service providers in an urban center and fewer providers as distance from 

the urban center increases.

Experts and Stakeholders 

Identified High Costs of 

Infrastructure, Spectrum, 

and Video Content as 

Limiting Competition

Infrastructure
Page 11 GAO-17-742 Broadband

Figure 4: Number of Fixed Broadband Providers in Dallas-Fort Worth, Texas Area, by Census Block

Experts and stakeholders also told us that regulations and rules regarding 

permitting, pole attachments, and rights-of-way are barriers to deploying 

broadband infrastructure. For example, a broadband provider told us 

providers must obtain permits from utilities, municipalities, and other 

government officials before they can install antennas and other necessary 

equipment. An expert from a broadband provider noted that the 

processes for acquiring these permits are sometimes tailored for smaller 

deployments of infrastructure. This can favor existing broadband 

providers that are making relatively small additions to their network, but 

can create delays for a new provider since establishing a network 

requires a larger scale deployment of infrastructure. An expert from a 

broadband association added that fees associated with these permits can 

be costly.

Aside from fees, regulations associated with permitting processes can 

result in delays, which also increase costs for potential market entrants. 

For example, an expert from a broadband provider described how getting 

access to poles for the installation of broadband infrastructure can take 2 

to 3 months due to state regulations specifying the amount of time that 

existing companies have to make room on the poles for new providers. 

This expert explained that these delays become more significant when 

building out fixed connections to consumers’ homes due to the large 

number of poles—sometimes thousands per week—that service 
Page 12 GAO-17-742 Broadband

providers must access to effectively deploy their infrastructure. While 

costs and delays can arise, a representative of a utility association noted 

that installing wires or cables under a road can decrease that road’s 

lifespan, leading to increased costs for the municipality. Further, this 

representative told us that wires or cables can sometimes run through a 

municipality without providing that community with service, ultimately 

leading to increased costs for the municipality without any offsetting 

benefits.

Mobile providers rely on spectrum to transmit broadband service through 

the air, but according to an economist, acquiring spectrum licenses can 

be very expensive. Furthermore, spectrum is a finite resource. According 

to a representative of a consumer advocacy organization, much of the 

most valuable spectrum is already licensed to existing broadband service 

providers. Some of this spectrum is also used by the federal government. 

The representative also said spectrum at lower frequencies is valuable 

because lower frequencies are able to travel greater distances. This 

allows companies that hold licenses to lower frequency spectrum bands

to use fewer antennas (high-frequency spectrum bands require more 

antennas, as discussed later). According to a representative of an 

association for mobile broadband providers, because much of this low 

frequency spectrum is already licensed, potential competitors may be at a 

disadvantage since there is little such spectrum left for them to license.

An expert in mobile technology told us that greater sharing of spectrum 

already assigned to commercial and government users may reduce the 

extent to which spectrum is a barrier to entry and facilitate more 

competition. For example, this expert told us that sharing such spectrum 

can help potential entrants to the broadband market by allowing them to

lease spectrum from these existing users at a lower cost than purchasing 

it through an FCC auction. As discussed later, FCC has taken some 

actions to facilitate spectrum sharing, including addressing some 

regulatory barriers, and to provide additional spectrum for the provision of 

wireless service.

In the fixed broadband market, experts and stakeholders identified the 

ability to offer video content from television networks as an often 

important factor in determining a service provider’s ability to be a viable 

competitor. Many broadband providers are also television providers, 

Spectrum

Video Content
Page 13 GAO-17-742 Broadband

offering packages with multiple television networks for paid subscription.25

These broadband providers “bundle” their broadband service with their 

television service. An economics and antitrust expert told us that the 

practice of bundling such video content with broadband service confers a 

competitive advantage and that it is generally more expensive for 

consumers to purchase those services separately. A representative from

a broadband provider added that customers often expect video content 

service in addition to broadband service.

Acquiring video content from television networks can be expensive for 

smaller broadband providers. Television networks charge providers fees 

for delivering their content to consumers. According to the economics and 

antitrust expert, a provider with more subscribers has more bargaining 

ability and can therefore negotiate lower fees for programming. A 

representative of a broadband provider association noted that this 

negotiating pattern favors larger incumbent providers that have larger 

subscriber bases. The relatively higher programming fees for any 

potential smaller or new competitor are, therefore, a barrier to entry to the 

broadband market.26 The economics and antitrust expert added, however, 

that in the future consumers may drop television service subscriptions 

due to the increasing availability of video content on the Internet, such as 

through services like Netflix.

 25Many cable-based broadband providers were originally cable television providers, 

providing packages of television networks that include broadcast (e.g., NBC) and 

nonbroadcast (e.g., TBS) networks. Other types of broadband providers, such as 

telecommunications providers (e.g., Verizon), also offer television packages. Companies 

that offer packages of television networks are referred to in our report as “television 

providers.”

26We previously reported on video access and cost issues. See GAO, Video Marketplace: 

Competition is Evolving, and Government Reporting Should Be Reevaluated, 

GAO-13-576 (Washington, D.C.: June 25, 2013). We recommended that FCC study the 

advantages and disadvantages of different reporting frequencies for its cable industry 

price and video competition reports. FCC implemented this recommendation. 
Page 14 GAO-17-742 Broadband

The experts and stakeholders we spoke to told us that there has been 

consolidation in the broadband industry marked by several horizontal and 

vertical mergers in recent years, and some experts expect more in the 

years ahead. Figure 5 below illustrates a horizontal and a vertical merger. 

A horizontal merger represents the consolidation of two companies that 

offer the same services, such as the merger of two providers of cablebased broadband. A horizontal merger may reduce competition in a 

market because the merger is the union of two prior competitors, resulting 

in a decrease in the number of competitors in a market. Such mergers are 

reviewed by FCC for potential effects on consumers, as discussed later.

Vertical mergers—mergers that involve companies in a buyer-seller 

relationship, such as broadband and televisions providers (buyers) and 

television networks (sellers)—can also affect competition. An expert in 

antitrust litigation said that vertical mergers have the potential to limit 

competition if new services acquired by a broadband provider can affect 

the business of its competitors. For example, a fixed broadband and 

television provider that acquires a television network important to its rival 

competitors may increase the costs that those competitors pay for that 

network’s content. FCC cited this as a concern in the proposed merger 

between Comcast, a television and broadband provider, and 

NBCUniversal, a television network and video content producer.27 An 

expert from a consumer advocacy group told us he expects more future 

vertical mergers between broadband and television providers and video 

content producers because video content is an expensive input for 

broadband and television providers.

 27Applications of Comcast Corporation, General Electric Company and NBC Universal, 

In.; For Consent to Assign Licenses and Transfer Control of Licensees, Memorandum 

Opinion and Order, 26 FCC Rcd 4238 (2011).

Experts and Stakeholders 

See Industry 

Consolidation and 

Growing Similarity of Fixed 

and Mobile Services as 

Increasingly Affecting 

Competition
Page 15 GAO-17-742 Broadband

Figure 5: Illustration of Horizontal and Vertical Mergers

According to experts and stakeholders we spoke to, fixed and mobile 

broadband services are not fully substitutable for one another, but may be 

in the future. An expert from a broadband association noted that these 

services are becoming increasingly similar to one another and that this 

similarity is likely to become more pronounced. 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. A number of factors 

demonstrate the similarity between fixed and mobile services, for 

example:

• Increasingly similar infrastructure: Industry experts said that the 

infrastructure for the 5G wireless network in higher-frequency 

spectrum bands will require high-density deployments of small 

antennas because 5G will use spectrum that transmits data over 

shorter distances than existing mobile technology. Consequently,

such 5G networks will rely on an extensive installation of fiber-optic 

cables to provide high speed Internet connections to these antennas 

that service relatively small coverage areas. According to an 

economist with expertise in the broadband industry, this reliance on 
Page 16 GAO-17-742 Broadband

building out fiber-optic cables is similar to fixed broadband 

infrastructure deployment in that it relies heavily on the installation of 

wires or cables. This same economist noted that this might result in 

less competition because some mobile companies may be unable to 

keep up with the costs required to install and maintain additional wires 

or cables and other infrastructure necessary for some 5G service. 

Just as mobile broadband providers are deploying infrastructure that 

is similar in some respects to fixed providers, an expert from a 

broadband infrastructure association said that fixed providers are 

deploying infrastructure similarly to mobile providers. For example, 

one fixed broadband provider told us it is building out Wi-Fi hotspots—

areas that allow its customers to remotely connect their devices to the 

Internet through Wi-Fi—with the goal of providing subscribers 

connectivity away from home while they remain in range of those 

hotspots.

• Increasingly similar speed: Experts and stakeholders said that, if 

providers successfully deploy it, 5G is likely to provide customers with 

speeds comparable to those typically received via fixed broadband. 

However, a broadband industry expert noted that consumers’ demand 

for speed may continue to grow, particularly due to technologies that 

require fast Internet speeds such as higher video resolutions and 

virtual reality. Further, an industry expert told us that mobile providers’

future speed increases will likely be surpassed by fixed providers’

future speed increases. Under such a scenario, improvements in fixed 

providers’ speeds could possibly limit the degree to which mobile 

speeds become comparable to those provided by fixed service.

• Increasingly similar video content: According to an industry expert, 

media transmitted via the Internet, such as Netflix, is becoming more 

popular with consumers. According to a separate expert from a 

broadband provider association, mobile broadband providers are 

increasingly looking to offer unlimited data service plans, which could 

make mobile providers more competitive with fixed providers. 

According to an industry stakeholder, while subscribers have been 

able to stream video on their mobile devices, streaming video typically 

counts against a subscriber’s monthly data allowance. This 

stakeholder noted that generally subscribers to fixed broadband 

service do not have such monthly data allowances. Recently, 

however, national mobile broadband providers have begun offering 

subscribers unlimited video content that would not count against their 

monthly allowance. One industry expert told us that unlimited plans 

may make mobile service more substitutable with fixed service. The 

expert said that these unlimited plans, however, do not offer the same 

level of video resolution available on fixed connections, making the 
Page 17 GAO-17-742 Broadband

service more appropriate for smaller mobile devices than larger 

televisions.

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.28 In 2016, 

to further support those new regulations, the agency entered into an 

agreement with the National Conference of State Historic 

Preservation Officers and the Advisory Council on Historic 

Preservation to exclude some types of small wireless infrastructure 

from certain historic review processes.29

• In 2015, FCC revised its regulations to address a disparity in the rates 

that utilities could charge telecommunications carriers versus cable 

 28Acceleration of Broadband Deployment by Removing Wireless Facilities Siting Policies, 

Acceleration of Broadband Deployment: Expanding the Reach and Reducing the Cost of 

Broadband Deployment by Improving Policies Regarding Public Rights of Way and 

Wireless Facilities Siting, Report and Order, 29 FCC Rcd 12865 (2014).

29Wireless Telecommunications Bureau Announces Execution of First Amendment to the 

Nationwide Programmatic Agreement for the Collocation of Wireless Antennas, Public 

Notice, 31 FCC Rcd 8824 (2016).

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
Page 18 GAO-17-742 Broadband

providers for attaching their equipment to poles.30 According to FCC, 

keeping pole attachment rates low and consistent through these 

revised rules would support broadband deployment and competition.

• In March 2017, FCC established a Broadband Deployment Advisory 

Committee to identify regulatory barriers to infrastructure investment 

and make recommendations to the commission on how to reduce or 

remove such barriers in order to accelerate broadband deployment.31

• In April 2017, FCC sought public input on rules to: (1) accelerate 

broadband deployment by removing barriers to wireline infrastructure 

investment at the federal, state, and local level; (2) speed the 

transition from copper and other older infrastructure to fiber-optic 

cables and other infrastructure that supports broadband; and (3) 

reform FCC regulations that increased costs and slowed broadband 

deployment.32

• In April 2017, FCC also sought comment on additional ways to 

expedite wireless facility deployment, including expediting state and 

local processing of wireless facilities siting applications and potential 

modifications to the processes for historic preservation and 

environmental reviews of such applications.33

Stakeholders we spoke to told us that FCC’s rulemakings and other 

actions to reduce infrastructure costs and delays are helpful in supporting 

broadband deployment and, thus, competition. For example, 

representatives of an industry association told us that FCC’s 2016 

agreement with the National Conference of State Historic Preservation 

Officers and the Advisory Council on Historic Preservation will reduce 

costs and time frames associated with deploying wireless infrastructure 

and subsequently promote greater competition. Representatives of 

another industry association added that FCC’s rules to keep pole 

attachments rates low and consistent would help reduce costs and 

 30Implementation of Section 224 of the Act A National Broadband Plan for Our Future, 

Order on Reconsideration, 30 FCC Rcd 13731 (2015).

31New Docket Established for Broadband Deployment Advisory Committee, Public Notice, 

32 FCC Rcd 2929 (2017). 

32Accelerating Wireline Broadband Deployment by Removing Barriers to Infrastructure 

Investment, Notice of Proposed Rulemaking, Notice of Inquiry, and Request for Comment, 

32 FCC Rcd 3266 (2017).

33Accelerating Wireline Broadband Deployment by Removing Barriers to Infrastructure 

Investment, Notice of Proposed Rulemaking, Notice of Inquiry, and Request for Comment, 

32 FCC Rcd 3330 (2017).
Page 19 GAO-17-742 Broadband

uncertainties that providers experience when deploying wires or cable on 

utility poles.

Other stakeholders told us they believe additional FCC efforts are needed 

to address barriers to deploying broadband service. For example, 

representatives of a company that provides mobile broadband service 

noted that FCC’s efforts to streamline access to utility poles were a step 

in the right direction but that additional efforts were needed, including 

steps to require timely access to utility poles for providers to deploy 

infrastructure for broadband service. In April 2017, the agency proposed 

additional changes to its pole attachment rules in two proceedings that 

may address some stakeholder concerns, including steps to require utility 

companies to provide more timely access to utility poles.34 Among other 

things, FCC proposed actions to speed broadband provider access to 

utility poles and establish a 180-day period for FCC resolution of pole 

access complaints by providers. The agency also sought comment on 

improving state and local infrastructure reviews, such as zoning requests, 

and how the FCC’s rules and procedures for complying with the National 

Historic Preservation Act and National Environmental Policy Act can be 

modified to minimize costs and delays.35

FCC has auctioned spectrum and taken other actions to facilitate wider 

access to spectrum, for example:

• In 2015, FCC adopted a new bidding preference for rural telephone 

companies to help them to acquire spectrum.36

• In 2015, FCC also adopted new rules to facilitate greater spectrum 

sharing, including removing barriers to commercial use of some 

spectrum that was previously reserved for federal use.37

 3432 FCC Rcd 3266 (2017); 32 FCC Rcd 3330 (2017).

3532 FCC Rcd 3330 ¶¶ 4, 21, 32-33 (2017). 

36In the Matter of Updating Part 1 Competitive Bidding Rules, Part 1 Report & Order, 30 

FCC Rcd 7493 ¶¶ 86-108 (2015).

37In the Matter of Amendment of the Commission’s Rules with Regard to Commercial 

Operations in the 3550-3650 MHz Band, Report and Order and Second Further Notice of 

Proposed Rulemaking, 30 FCC Rcd 3959 (2015). 
Page 20 GAO-17-742 Broadband

• In 2016, FCC adopted its “Spectrum Frontiers” proposal in which FCC 

has started to identify and make available new spectrum capable of 

supporting advances in 5G technologies.38

• From 2016 to 2017, FCC also conducted its first “incentive auction”

designed to repurpose spectrum currently used for broadcast 

television for use in providing mobile broadband.39 Among other 

things, the auction allowed broadcast TV providers to give up 

spectrum in return for payment and, in doing so, allowed broadband 

providers to use this spectrum for broadband service.

Industry stakeholders told us that FCC’s actions to facilitate spectrum 

access were helpful to increasing competition in the broadband market. 

For example, representatives of a fixed broadband provider association 

noted that FCC’s Spectrum Frontiers initiative freed up spectrum that 

could enable a fixed provider to deploy mobile service and thus compete 

with existing mobile broadband providers. Representatives of an industry 

association for mobile providers added that FCC had helped smaller 

companies compete for spectrum by setting smaller geographic license 

sizes in some spectrum auctions. The representatives said that this has 

allowed smaller companies to more effectively compete against larger 

companies because it can be difficult for smaller companies to compete 

for spectrum licenses when such licenses cover larger geographic areas. 

Representatives of a consumer advocacy group added, however, that 

FCC’s efforts have not been effective at helping smaller companies 

compete for access to spectrum because, according to these 

representatives, it can still be too costly for some companies to acquire 

spectrum, regardless of the agency’s efforts.

As discussed, FCC is required to review mergers and other transactions 

between telecommunications companies. In doing so, FCC is required to 

determine whether the proposed transaction, such as a merger between 

two companies, would serve the public interest, convenience, and 

 38Use of Spectrum Bands Above 24 GHz for Mobile Radio Services, Report and Order 

and Further Notice of Proposed Rulemaking, 2016 FCC LEXIS 2470 (2016).

39FCC’s incentive auction comprised two separate but interdependent auctions—a 

reverse auction to determine the price at which broadcasters would voluntarily relinquish

some or all of their spectrum rights and a forward auction to determine the price 

companies are willing to pay for the relinquished spectrum licenses. In 2016, we reported 

on the possible effects of FCC’s incentive. See GAO, Telecommunications: Information on 

Low Power Television, FCC’s Spectrum Incentive Auction, and Unlicensed Spectrum Use, 

GAO-17-135 (Washington, D.C.: Dec. 5, 2016). 
Page 21 GAO-17-742 Broadband

necessity, and preserve and promote competition.40 According to FCC 

officials, the agency examines not only whether competition would be 

harmed by a transaction but also whether it would be enhanced. FCC 

may approve such a transaction outright or with conditions. For example, 

in 2015, it reviewed and approved a transfer of licenses between AT&T, a 

telecommunications company, and DIRECTV, a satellite-based television 

provider. In reviewing and approving the proposed transfer, FCC required 

the new combined company to build out fiber-optic cables for broadband 

to 12.5 million locations to help offset what the agency determined would 

be reduced competition as a consequence of the merger.41

Representatives of an industry association told us that FCC’s transaction 

review process has helped competition by restricting transactions among 

large companies that would make it more difficult for smaller broadband 

providers to compete. Representatives from a consumer advocacy group 

similarly noted that the agency’s transaction review process has 

supported competition by keeping large broadband providers from 

merging and, thus, reducing the number of options for consumers. 

However, as previously discussed, some experts and stakeholders told 

us they believe that more industry mergers may be inevitable given the 

high costs, such as for video content.

Although FCC has taken a number of actions to promote broadband 

competition, it has not assessed how well these actions have been 

working toward that end. FCC officials told us that the agency’s actions, 

including regulations, spectrum auctions, and merger reviews were either 

ongoing or too recent for FCC to be able to fully evaluate for their effect 

on competition. Further, FCC officials noted that evaluating the 

effectiveness of its actions on competition can be difficult because it often 

takes several years before such actions can have a measurable effect, 

and that during that time, factors beyond the agency’s influence can affect 

competition, such as changes in consumer demand for broadband. 

Stakeholders’ views varied regarding the effectiveness of FCC’s actions 

to promote competition. For example, some stakeholders said that FCC 

had taken helpful steps to address barriers providers face in deploying 

broadband infrastructure, while others noted that additional efforts were 

needed. A broadband provider added that FCC needed to do more to 

 4047 U.S.C. §§ 214(a), 310(d); see Applications of AT&T-DIRECTV, Order, 30 FCC Rcd 

9131 at 9-10, ¶¶ 18-19 (2015).

4130 FCC Rcd 9131 (2015).
Page 22 GAO-17-742 Broadband

help ensure that its actions were keeping pace with the quickly evolving 

market. Further, as indicated by FCC’s broadband data, competition does 

not exist in all areas. 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.

While challenges may exist to a full evaluation of the effect of FCC’s 

actions in promoting competition, the agency has other ways through 

which it could obtain input on its actions and assess how well they are 

working. Specifically, FCC regularly solicits input from stakeholders and 

others on a variety of issues, such as how to benchmark speed, to inform 

its annual broadband progress reports. FCC has sought input for these 

reports from stakeholders on actions it should consider taking moving 

forward to promote broadband competition, but it has not sought such 

input on how well its actions are working to promote broadband 

competition. Having additional input on the effectiveness of the agency’s 

actions could help FCC better understand whether its range of 

approaches are successful in promoting competition, as well as whether 

those actions remain relevant in the face of emerging factors that could 

affect competition. Factors that we previously discussed, including 

industry consolidation and the development of 5G technologies, have the 

potential to significantly change the broadband market and thus have 

implications for competition. For example, an expert from a broadband 

provider told us that 5G technology may be too costly for some providers 

to remain competitive, leading to a potential reduction in the number of 

mobile broadband providers.

Federal standards for internal control, which provide a framework for 

identifying and addressing major performance and management 

challenges facing agencies, stress the importance of obtaining 

information from external sources that may have a significant effect on an 

agency achieving its goals. Without input from stakeholders and others 

affected by these actions, FCC may be missing key information to help it 

determine if any changes are needed in its approach for promoting 

competition.
Page 23 GAO-17-742 Broadband

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.42 A stated 

purpose of the Telecommunications Act, which amends the 

Communications Act of 1934, is securing lower prices and higher quality 

services for consumers and encouraging the rapid deployment of new 

telecommunications technologies through FCC action to promote 

competition and reduce regulation.43 Specifically, the Act requires FCC to 

annually assess whether advanced telecommunications capability—a 

term that, as discussed, encompasses broadband—is being deployed to 

all Americans in a reasonable and timely fashion.44 In 2011, FCC 

considered collecting broadband price and service quality data from 

providers as part of its biannual collection of data on broadband 

deployment but decided against doing so.45 According to FCC officials, 

the agency did not pursue collection of these data given the response to 

its inquiry, including providers’ concerns about the burden to submitting 

such data. For example, representatives of an association for broadband 

providers stated that broadband price data are highly variable because of 

promotion pricing, such as temporary lower introductory rates, and that 

clearly identifying the price of broadband is challenging when a consumer 

is paying for a bundled package with video content or other services.

FCC collects data and issues reports on broadband deployment, which 

can help FCC and congressional decision-makers understand where 

consumers have broadband service and how many service providers they 

have to choose from, among other metrics related to consumers’

experience with broadband. For example, FCC collects broadband 

deployment and subscription data from certain broadband providers. FCC 

publishes some of this and other information in its annual Broadband 

Progress Report, providing some information on the extent of fixed 

 42In the Matter of Inquiry Concerning the Deployment of Advanced Telecommunications 

Capability to All Americans in a Reasonable and Timely Fashion, Broadband Progress 

Report, 30 FCC Rcd 1375 (2015).

43Communications Act of 1934, Pub. L. No. 73-416, 48 Stat. 1064 (1934), as amended by 

Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996) (codified as 

amended at 47 U.S.C. § 151).

4447 U.S.C. § 1302(b).

45See In the Matter of Modernizing the FCC Form 477 Data Program, Notice of Proposed 

Rulemaking, 26 FCC Rcd 1508 (Feb. 8, 2011). 

FCC Assesses Some 

Indicators of Consumers’

Broadband Service 

Experience but Lacks 

Information on How 

Competition Affects 

Service Price and Quality
Page 24 GAO-17-742 Broadband

broadband deployment and speeds in given areas of the country. 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 also analyzes 

subscription data on Internet access mainly for fixed service in its Internet 

Access Services reports.

46 For mobile broadband, the agency annually 

reports industry and financial data in its Mobile Wireless Competition 

Reports, including assessments of deployment, subscribership, and price 

metrics.

47 Further, FCC collects actual speed data and annually 

compares fixed providers’ speed data with their advertised speeds in its 

Measuring Broadband America reports.

48 FCC collects some fixed 

broadband price data as well through a survey of urban broadband 

service providers.49

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. FCC officials told us 

that it is difficult to assess the effect of competition on broadband price 

and service quality without data showing prices and service quality 

indicators by the number of providers in a given area. Stakeholders we 

spoke to did not have consistent views about whether having more or 

fewer providers serving selected markets had effects on price and service 

quality in all markets. For example, representatives of a broadband 

provider noted that when it entered a market in which there was 

previously only one broadband provider, the other provider lowered its 

prices and offered higher quality service to customers. In contrast, some 

stakeholders noted that competition in a market does not necessarily 

mean that consumers will pay lower prices or have higher quality service. 

For example, representatives of one broadband provider told us that 

some providers use national or regional pricing and service plans and that 

it may not be practical to change these plans in areas with more or less 

 46FCC, Internet Access Services, Industry Analysis and Technology Division (Washington, 

D.C.: April 2017).

4731 FCC Rcd 10534 (2016).

48FCC, Measuring Broadband America, Fixed Broadband Report at 6 (2016).

49FCC annually conducts a survey of residential Internet access service rates in urban 

areas to help ensure that recipients of FCC’s universal service support funding offer 

broadband services at reasonably comparable rates to those in urban areas.
Page 25 GAO-17-742 Broadband

competitors. Further, an industry expert told us that the high cost of 

deploying fixed broadband infrastructure may prevent a provider from 

offering lower prices or improving its service when faced with competition 

because the provider has to recoup its initial investment.

As discussed earlier, experts and stakeholders noted the potential for 

further industry consolidation and increasing similarity of fixed and 

mobiles services. While some experts and stakeholders noted that the 

increasing similarity of fixed and mobile services could lead to more 

competition because fixed and mobile providers would compete with one 

another, others told us that these developments could also lead to fewer 

choices for consumers and, possibly, higher prices and less pressure to 

improve service quality. For example, as discussed, industry 

consolidation could lead to fewer broadband choices for consumers. 

Further, representatives of a consumer advocacy group noted that the 

costs of deploying 5G technology may lead to either consolidation or the 

exit of some existing mobile providers, which the expert added could lead 

to higher prices due to the smaller number of providers that remain in the 

market.

As noted earlier, federal standards for internal control stress the 

importance of obtaining information from external sources that may have 

a significant impact on an agency achieving its goals. While additional 

data collection may not be a viable approach, given challenges such as 

isolating prices for broadband from prices for other services in a bundled 

package, FCC has alternative methods of information collection that could 

help it regularly examine the effects of competition on price and service 

quality for consumers. Specifically, FCC seeks comments from 

stakeholders and others on a number of topics to inform its annual 

broadband progress reports. FCC reviews and includes reference to 

these comments in its annual reports. However, the agency has not 

sought comments for these reports on how the number of broadband 

providers affects the prices and service quality that consumers 

experience with broadband service. Such information could inform FCC’s 

actions to promote competition in an effort to secure lower prices and 

higher quality broadband services for consumers.

The broadband industry is subject to ongoing and emerging 

developments that may include industry consolidation and increasing 

similarity of fixed and mobile service options. FCC provides a wealth of 

information on broadband, including annual reports that describe the state 

of the broadband market and present opportunities for FCC to solicit 

Conclusions
Page 26 GAO-17-742 Broadband

feedback on its actions from stakeholders and others in the public. 

Despite FCC’s efforts, about half of Americans have access to only one 

fixed broadband provider. While most Americans have several choices for 

a mobile broadband provider, fixed and mobile service do not provide the 

same experience. Moving forward, FCC could take steps to better 

understand how well its actions to promote broadband competition are 

working. In particular, by using its established process for soliciting public 

input as part of its annual reporting on the broadband market, FCC could 

gain useful insight on whether its actions are working as anticipated or, if 

not, how they might be corrected. Further, while FCC collects a variety of 

data related to broadband and reports on a variety of issues related to 

consumers’ broadband experience, it does not examine how broadband 

competition affects the prices and service quality that consumers 

experience. FCC’s past experience demonstrates that additional 

collection of these data may not be viable. As noted, however, FCC has 

an established process for seeking public input that could help the agency 

better understand the effect of competition on broadband prices and 

service quality. 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.

We are making the following two recommendations to the Chairman of 

the FCC:

• As part of its annual reporting on the broadband market, FCC should 

solicit and report on the views of stakeholders and others on how well 

FCC’s actions promote broadband competition. (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. (Recommendation 2)

We provided a draft of this report to FCC for review and comment. FCC 

concurred with our recommendations and provided technical comments, 

which we incorporated, as appropriate. FCC’s comments are reprinted in 

appendix III.

We are sending copies of this report to the appropriate congressional 

committees and the Chairman of the FCC. In addition, the report is

available at no charge on GAO’s website at http://www.gao.gov.

Recommendations

Agency Comments
Page 27 GAO-17-742 Broadband

If you or your staff have any questions about this report, please contact 

me at (202) 512-2834 or goldsteinm@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff who made major contributions to 

this report are listed in appendix IV.

Sincerely yours,

Mark Goldstein

Director, Physical Infrastructure Issues
Appendix I: List of Experts and Discussion 

Questions

Page 28 GAO-17-742 Broadband

• Jonathan Adelstein, Wireless Infrastructure Association 

• Phillip Berenbroick, Public Knowledge

• Richard Clarke, AT&T

• Gerald Faulhaber, the University of Pennsylvania

• George Ford, the Phoenix Center for Advanced Legal and Economic 

Public Policy Studies

• Shane Greenstein, Harvard Business School

• Russell Hanser, Wilkinson Barker Knauer (moderator)

• John Horrigan, Pew Research Center

• Scott Jordan, University of California, Irvine

• Milo Medin, Google

• Craig Moffett, MoffettNathanson Research

• Steven Morris, NCTA - The Internet & Television Association

• Michael Powell, NCTA - The Internet & Television Association

• Jeffrey Reed, Virginia Tech

• William Rogerson, Northwestern University

• Nancy Rose, Massachusetts Institute of Technology

• Jonathan Sallet, the Brookings Institution 

• Marvin Sirbu, Carnegie Mellon University

• Christopher Yoo, University of Pennsylvania

• How should “competition” in the broadband market be defined and 

measured?

• What is known about the extent of competition in the residential 

broadband market today?

• How have consumers been affected by the current level of 

competition in the fixed broadband market?

• How have consumers been affected by the current level of 

competition in the mobile broadband market?

• How has the content market been affected by the current level of 

competition in broadband?

• How are broadband providers affected by competition?

Appendix I: List of Experts and Discussion 

Questions

Meeting of Experts 

Participants

Discussion Questions
Appendix I: List of Experts and Discussion 

Questions

Page 29 GAO-17-742 Broadband

• What factors most hinder competition in broadband markets?

• What factors attract competitors to a broadband market?

• Which factors can government most affect? Which can government 

least affect?

• How can industry support competitive broadband markets?

• How is the state of competition in the broadband market likely to 

change in the next 5 years?

• What will be the likely effects of these changes on the broadband 

market?

• What is the appropriate role, if any, for the Federal Communications 

Commission (FCC) with regard to broadband competition?

• What should be FCC’s top priorities with regard to broadband 

competition from your perspective?
Appendix II: Objectives, Scope, and 

Methodology

Page 30 GAO-17-742 Broadband

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. Our meeting of experts was held at the National Academy 

of Sciences (NAS) in February 2017 over one-and-a half days. Staff from 

NAS assisted us in identifying experts for the meeting. To identify the 

experts appropriate for this meeting, NAS relied on staff experience and 

professional judgment drawn from its Board on Science, Technology, and 

Economic Policy. Experts were selected by us with the goal of ensuring 

that a broad spectrum of views was represented from multiple broadbandrelated areas, such as those of broadband providers, academia, and 

consumer and industry groups. The range of the experts’ knowledge 

included both fixed and mobile broadband services.

The meeting was moderated by one individual who guided the other 18 

experts though a series of 14 questions that served as the basis for 

discussion. We developed these questions for the meeting of experts in 

consultation with NAS staff. This meeting of experts was planned and 

convened with the assistance of NAS to better ensure that a breadth of 

expertise was brought to bear in the meeting’s preparation; however, all 

final decisions regarding its substance and expert participation were our 

responsibility. The meeting was recorded and transcribed to ensure that 

we accurately captured the experts’ statements, and we analyzed the 

transcripts to identify the experts’ key statements regarding factors that 

affect competition in the broadband market or that may do so in the 

future. Specifically, we developed categories for expert statements and 

then coded key portions of the transcript into those categories based on 

the consensus of multiple analysts.

We selected the 23 stakeholders that we interviewed based on our prior 

telecommunications work, other broadband competition literature, and 

recommendations from stakeholders we interviewed. We selected 

broadband providers to include companies that offer broadband via a 

variety of methods, such as satellite, fiber-optic cables, and coaxial cable, 

among others. We interviewed these stakeholders about their knowledge 

of factors affecting broadband competition. Stakeholders were from: 8 

broadband providers, 7 associations representing broadband providers 

and utilities, 4 financial services firms, and 4 consumer advocacy groups. 

Appendix II: Objectives, Scope, and 

Methodology
Appendix II: Objectives, Scope, and 

Methodology

Page 31 GAO-17-742 Broadband

With respect to experts and stakeholders, because we asked for their 

opinions and did not conduct a survey in which every expert and 

stakeholder could provide a response as to whether a certain issue was 

relevant for them, we do not enumerate responses in the report. Instead, 

we analyzed the responses and reported on common themes that arose 

from our expert meeting and stakeholder interviews. Because we 

selected a non-generalizable sample of stakeholders and experts to 

discuss factors that affect broadband competition, the information cannot 

be used to make inferences about a population.

To identify and examine the actions FCC has taken to promote 

broadband competition, we reviewed statutes1 and regulations pertaining 

to FCC’s role with regard to broadband and federal standards for internal 

control, which provides a framework for improving accountability in 

achieving an entity’s mission,2 and interviewed FCC officials about 

actions taken by FCC to promote competition. We reviewed FCC 

documentation on actions it has taken to promote competition, including 

orders, notices of proposed rulemaking, and FCC comments on proposed 

mergers. We interviewed FCC officials about these actions and how FCC 

assesses their effectiveness. Further, we asked stakeholders, as 

identified above, about the effectiveness of FCC’s actions to promote 

broadband competition. We also reviewed information that FCC collects 

and reports on related to consumer experience with broadband, including 

its twice yearly collection of broadband deployment data from broadband 

providers, as described below, the 2016 Broadband Progress Report, 

19th Mobile Wireless Competition Report, and other reports.

We assessed broadband deployment using FCC’s fixed and mobile 

broadband deployment data collected through its Form 477, which 

broadband providers complete and submit to FCC. We used FCC’s fixed 

speed benchmark for advanced telecommunications capability of 25 

megabits per second (Mbps) download and 3 Mbps upload to classify 

fixed services as broadband,3 and Long Term Evolution (LTE) coverage 

to classify the mobile service as broadband because LTE is used by the 

 1

Communications Act of 1934, Pub. L. No. 73-416, 48 Stat. 1064 (1934), as amended by 

Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996) (codified as 

amended at 47 U.S.C. § 151).

2

GAO-14-704G.

3

We used the advertised speeds of the fixed providers in each Census block.
Appendix II: Objectives, Scope, and 

Methodology

Page 32 GAO-17-742 Broadband

mobile industry to identify service as broadband.4The data we used 

presented broadband deployment as of December 2015, the most recent 

period for which both fixed and mobile data are available.5 These data 

include, among other types of information, the names of fixed and mobile 

providers, the census blocks in which fixed providers offer service, 

geographic areas covered by mobile providers, whether the fixed service 

is for residential consumers, the maximum advertised download and 

upload bandwidth offered by fixed providers, and the type of technology 

offered by mobile providers. We combined FCC’s data with 2010 U.S. 

Decennial Census of Population data to determine approximate numbers 

of U.S. residential consumers who received fixed and mobile broadband 

service in a given census block and the number of different companies 

that offer service in those blocks. A census block is the smallest 

geographic unit used by the Census Bureau for the collection of data; 

census blocks have an average population of about 28 persons.6

We interviewed FCC officials and reviewed relevant documentation to 

determine the appropriateness and reliability of these data for the 

purpose of summarizing the deployment of broadband service. To assess 

the reliability of 2010 census data, we reviewed census documentation. 

Based on this information, we concluded that these data were reliable for 

the purpose of creating summary statistics and illustrations of broadband 

availability by number of U.S. residents. We acknowledge that FCC’s 

broadband data collected as part of FCC’s Form 477 overstate fixed 

broadband availability by counting an entire census block as served by 

providers who serve some, but not necessarily all, of that block. This 

limitation could be particularly problematic in areas with large census 

 4

FCC used LTE to estimate mobile broadband coverage in its 19th Mobile Wireless 

Competition Report. FCC added that LTE deployment does not necessarily result in 

specific guaranteed speeds for consumers. Currently, LTE is the industry-wide mobile 

broadband standard used to refer to the suite of advanced telecommunications processes, 

practices, and technologies that are available to consumers.

5

FCC data for fixed broadband deployment as of June 2016 were available at the time of 

our review. For the purposes of comparing fixed and mobile broadband deployment, we 

used data available as of December 2015—the latest data available for both types of 

services. 

6

The U.S. Decennial Census is a count of all individuals living in the United States and is 

performed by the U.S. Census Bureau, which is part of the U.S. Department of 

Commerce.
Appendix II: Objectives, Scope, and 

Methodology

Page 33 GAO-17-742 Broadband

blocks.7 Despite this limitation, we believe these data represent the best 

snapshot of fixed broadband availability. Regarding FCC’s Form 477 

mobile broadband data, we acknowledge that service quality can vary 

depending on weather and other interference, as well as the amount of 

demand being placed on a mobile network at any given time. Despite this 

limitation, we believe these data provide the best snapshot of mobile 

broadband availability.

We conducted this performance audit from June 2016 to September 2017 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

 7

FCC acknowledges this limitation. See Inquiry Concerning the Deployment of Advanced 

Telecommunications Capability to All Americans in a Reasonable and Timely Fashion, 

and Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of the 

Telecommunications Act of 1996, as Amended by the Broadband Data Improvement Act,

2016 Broadband Progress Report, 31 FCC Rcd 699, at 730 n.234 (2016).
Appendix III: Comments from the Federal

Communications Commission

Page 34 GAO-17-742 Broadband

Appendix III: Comments from the Federal 

Communications Commission
Appendix III: Comments from the Federal 

Communications Commission

Page 35 GAO-17-742 Broadband
Appendix IV: GAO Contact and Staff 

Acknowledgments

Page 36 GAO-17-742 Broadband

Mark Goldstein, (202) 512-2834 or goldsteinm@gao.gov

In addition to the individual named above, Andrew Huddleston (Assistant 

Director), James Leonard (Analyst-in-Charge), Melissa Bodeau, Kristen 

Farole, Camilo Flores, Terence Lam, John Mingus, Malika Rice, Sean 

Standley, and Walter Vance made key contributions to this report.

Appendix IV: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(100925)
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