The telecom industry lobby group that represents AT&T and Verizon has consistently claimed that net neutrality rules hurt broadband investment. Yet the same lobby group has released data showing that fiber deployment grew significantly while net neutrality rules were in effect.
Even more surprising: the lobby group, USTelecom, also recently claimed that an increase in broadband network investment that happened the net neutrality repeal was somehow caused by the repeal that hadn’t yet taken effect.
USTelecom released a new analysis last week, saying that, “from the end of 2015 to mid-2017, US fiber deployment grew from 21 percent to 29 percent of homes and competitive availability of wired broadband at 25Mbps download and 3Mbps upload [speeds] increased from 31 percent to 55 percent.” Fixed wireless deployment has also helped expand broadband access, USTelecom wrote.
“By mid-2017, broadband at 100Mbps download was available to 89 percent of Americans, compared to 10 percent in 2010. Moreover, fiber deployment and competitive availability of broadband at higher speeds continue to grow rapidly today, driven by competitive upgrades,” the lobby group said.
Notice the timeframe cited by USTelecom for its latest research—the end of 2015 to mid-2017. The Federal Communications Commission started enforcing the Obama-era net neutrality rules in June 2015, and the rules remained in place until June 2018 when Chairman Ajit Pai’s repeal took effect.
That means all of the progress touted by USTelecom happened while ISPs faced common carriage regulation including net neutrality rules that prohibited blocking, throttling, and paid prioritization. Cable lobby group NCTA last year similarly bragged about dramatic increases in broadband speeds while net neutrality rules were in place.
2015 to 2017 “was the exact period in which the industry keeps telling us it suffered from ‘unprecedented’ and ‘heavy-handed regulation’ like net neutrality that stifled industry investment,” Techdirt’s Karl Bode wrote today. “And yet here USTelecom is insisting that the exact period exhibited ‘rapid’ growth ‘driven by competitive upgrades.’ Why, it’s almost as if the telecom sector’s top lobbyists aren’t ideologically or ethically consistent.”
USTelecom is wrong—unless time moves backward
USTelecom also recently released new spending data that shows broadband providers increased capital investment in 2017 after a two-year decline.
Pai issued a press release touting the results the same day. The FCC chair took credit for the investment increase, saying he “has been focused on cutting through the regulatory red tape and increasing broadband investment” and that the new data “confirms that the FCC’s policies to promote broadband deployment are working.”
USTelecom credited Pai and Congress for the investment increase, saying, “Growth returned after a series of pro-investment steps taken by the FCC and Congress, including the Restoring Internet Freedom Order, the tech transition order and tax reform.”
But a spending increase in 2017 couldn’t have been caused by these actions. Pai’s “Restoring Internet Freedom” order that repealed net neutrality was approved by the FCC with less than three weeks remaining in 2017 and didn’t take effect until June 2018. Pai’s tech transition order—which repealed consumer protections related to discontinuance of old copper networks—was approved in November 2017 and didn’t take effect until August 2018.
Similarly, Congress’s tax bill was signed into law by President Trump with barely a week left in 2017 and took effect in 2018. In other words, it would have been impossible for these actions to boost broadband industry spending in 2017 even if broadband deployment was harmed by net neutrality and other consumer protection rules or by corporate tax rates.
Like USTelecom, Pai has struggled to find evidence supporting his case that the net neutrality repeal is boosting investment. The best evidence Pai could offer earlier this year was a handful of broadband projects that began during the Obama years while net neutrality rules were still in effect. Meanwhile, Charter and Verizon both said this year that they’re reducing capital expenditures, despite the net neutrality repeal.
ISPs also want more money from government
Together, the recent USTelecom announcements suggest that fiber deployment improved in 2016, when spending went down, and again in 2017, when spending went up. This isn’t necessarily contradictory as technology improvements can lower the cost of broadband deployment, and the spending data also includes wireless and cable deployments.
What’s clear is that small increases or decreases in industry-wide capital spending can’t automatically be attributed to government regulation. As AT&T told the FCC in 2010, capital investments are based on technology upgrade cycles and should not be expected to rise year after year. Capital investments are naturally “lumpy,” rising and falling from one year to the next based on specific needs at specific times, AT&T said at the time.
While USTelecom painted a rosy picture of broadband deployment in its announcement last week, it acknowledged that “significant challenges remain, especially in further narrowing rural broadband gaps.”
But USTelecom says that government deregulation alone won’t be enough to close the urban/rural divide. Instead, USTelecom repeated its argument that the government should increase subsidies to private ISPs in parts of the US where broadband is lacking. USTelecom wants the best of both worlds—more money from the government and minimal government oversight.
“Further progress will require additional funding,” USTelecom wrote.