Comcast's Tax-Cut Investment 'Increase' Is A Giant Nothingburger
from the praised-for-doing-nothing-differently dept
A common lobbying tactic in the telecom sector is to take something you were already planning to do anyway, then when it happens claim it only could have occurred thanks to “X” policy or lobbying favor. For example you’ll recall that every time AT&T wants a merger approved, the company will promise to “expand” broadband into areas it already planned to service. Regulators are frequently all-too-happy to let this disingenuous nonsense slide because (thanks to an unskeptical media) it helps portray them as having held a company’s feet to the fire — even if nothing is actually changing.
Fast forward to last week, when Comcast posted a missive to its website claiming that thanks to the GOP Tax plan and the Trump administration’s attack on net neutrality, the company would be doling out $1,000 bonuses to some employees, and spending fifty billion dollars on network investment over the next five years:
“Based on the passage of tax reform and the FCC’s action on broadband, Brian L. Roberts, Chairman and CEO of Comcast NBCUniversal, announced that the Company would award special $1,000 bonuses to more than one hundred thousand eligible frontline and non-executive employees. Roberts also announced that the Company expects to spend well in excess of $50 billion over the next five years investing in infrastructure to radically improve and extend our broadband plant and capacity, and our television, film and theme park offerings. With these investments, we expect to add thousands of new direct and indirect jobs.”
Except some reporters did something that’s notably unfashionable in the post-truth era: they actually checked Comcast’s math. Not too surprisingly, they discovered that Comcast’s promise to spend $50 billion over the next five years is something that was going to happen anyway based on Comcast’s recent spending and projected growth rates:
“In Q3 2017, the most recent quarter, Comcast’s capital expenditures were $2.4 billion. Continuing to spend at that rate, even if Comcast doesn’t increase spending to account for inflation, would push Comcast to $9.6 billion a year or $48 billion over the next five years…In the most recent four quarters combined (Q4 2016 through Q3 2017), Comcast spent $9.4 billion on capital investments. (Q4 2016 was the high point at $2.6 billion.) Continuing to spend $9.4 billion annually without any inflation-related increases would result in $47 billion over the next five years, a few billion below the “new” target.
…if Comcast continues increasing capital expenditures by the same rate as it did with net neutrality rules in place, the company would easily break the $50 billion figure that Roberts attributed to the net neutrality repeal and tax break.
Again, this is standard operating procedure at these companies. In 2009, Comcast top lobbyist David Cohen put a looming company plan to offer discounted broadband to low-income homes on hold. Why? He specifically wanted to use it as regulator bait to secure the company’s 2011 plan to acquire NBC Universal:
“At the time, Comcast was planning a controversial $30 billion bid to take over NBC Universal, and Cohen needed a bargaining chip for government negotiations. “I held back because I knew it may be the type of voluntary commitment that would be attractive to the chairman? of the Federal Communications Commission, Cohen said in a recent interview.
So again, this tactic to take something already planned and pretend it’s “new” is just how these companies operate. AT&T of course tried something similar by announcing it too would invest an additional $1 billion next year thanks to tax “reform” and the attack on net neutrality. But the company intentionally omits any hard math (like how much it would have spent anyway), allowing it to craft entire worlds out of hot air and nonsense. And again, media outlets that only mindlessly parrot these claims just create a massive PR bonanza, where companies are routinely praised for doing nothing out of the ordinary.
Which brings us to the company’s bonus promises. AT&T was routinely praised in the media for the bonuses, though few could be bothered to notice they were actually tied to a new contract hashed out with company unions, and had nothing to do with AT&T’s new, lower tax rate. In Comcast’s case, even if the bonuses weren’t already planned, they’re a pittance compared to the billions of dollars the company will net thanks to a permanently-lower tax rate, the death of net neutrality, and the dismantling of consumer broadband privacy protections earlier this year.
Again, the Trump administration’s assault on net neutrality is just one small part of an effort to completely gut nearly all state and federal oversight of some of the least competitive and least liked companies in America. The billions of additional dollars that can be generated via the abuse of captive markets is going to be incalculable, so a piddly one-time bonus (instead of a healthy raise) is literally the very least the company could do.