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FCC touts broadband success

The FCC says the availability of high-speed Net service in the United States is expanding rapidly. But consumer advocates say rate increases and a lack of competition are obstacles.

The Federal Communications Commission proclaimed Thursday that the availability of high-speed Internet services in the United States continues to expand rapidly, but some consumer advocates remain unimpressed.

In its third report to Congress on the subject, the FCC counted 9.6 million subscribers of high-speed broadband as of June 21, 2001, a 36 percent increase from the beginning of 2001. Residential and small-business customers accounted for 7.8 million of the total.

"Although one can easily point to specific communities or categories of customers in which broadband is not yet fully available, the record amply illustrates that the broadband market continues to grow, and that overall availability and subscribership have increased significantly, despite some slowing investment trends," FCC Chairman Michael Powell said in a statement.

Commissioners Kevin Martin and Kathleen Abernathy issued statements along with Powell supporting the report, while Commissioner Michael Copps dissented, saying the FCC did not have adequate data to truly determine whether broadband services were being set up in a reasonable and timely manner.

The report found that 7 percent of American households use some form of high-speed Internet service, up from 4.7 percent in January 2001.

Cable remained the dominant form of broadband access, with 5.2 million lines in service vs. 2.7 million DSL (digital subscriber line) lines, and about 200,000 satellite or fixed-wireless lines.

The report also indicated that many more consumers could sign up. For example, only about 8 percent of cable-ready homes opted for cable broadband service as of mid-2001, a moderate increase from 3 percent at the beginning of 2000.

"This is not a supply-side problem," said Mark Cooper, the director of research at the Consumer Federation of America. "They don't have the products people are interested in."

Other consumer advocates say rate increases from broadband companies have kept people away, and sparse competition in the sector has hurt broadband's acceptance.

"Generally speaking, the recent rate increases indicate that the industry has a long way to go before it can deliver competitive benefits to consumers," said David Butler, the media director at the Consumers Union.

The FCC said that at least one broadband provider offers service in 78 percent of all U.S. ZIP codes. But 20 percent of ZIP codes have service from only one broadband company.

The DSL market looks just as cozy. Baby Bell companies like Verizon Communications and SBC Communications provide 86 percent of the lines, compared with 7 percent operated by upstart phone carriers.

Despite disagreements, all FCC commissioners who issued statements stressed the importance of high-speed Internet access and urged for more intense efforts to make the service more available.

Although "broadband deployment is occurring reasonably, that is no reason to rest on our laurels," Abernathy said.