Ajit Pai Lies (Again) To Congress With Claim Net Neutrality Killed Broadband Investment

Say That Again

from the repetition-forges-reality dept

So, we’ve kind of been over this. One of the cornerstones of the broadband industry’s flimsy and facts-optional assault on net neutrality was that the rules somehow demolished broadband industry investment. Of course the press has noted time and time and time again how that’s simply not true.

It’s simply not debatable. Close examinations of SEC filings and public earnings reports during the period highlight how this alleged investment apocalypse never actually happened. What’s more, CEOs from nearly a dozen ISPs are on public record telling investors (who by law they can’t lie to) that the claim was effectively bogus, and that they saw no meaningful impact from the rules. Again, that’s not surprising, since many broadband industry executives have also acknowledged the rules, which were discarded last June, really didn’t hurt them unless they engaged in anti-competitive behavior.

Still, the false claim gained traction online thanks to industry-linked economists and the usual industry stenographers. These days, the only folks you’ll find still clinging to this repeatedly debunked narrative are either ISPs, ISP-linked consultants, or the think tanks, fauxcademics and other policy voices ISPs pay to intentionally muddy the discourse waters. And oh, Ajit Pai, who again this week lied to Congress in claiming that net neutrality was a broadband investment apocalypse. From his testimony during an “oversight” (that term is used loosely) hearing:

“…we?ve returned to the successful light-touch regulatory framework under which the Internet flourished in the United States from 1996 to 2015. Under the heavy-handed regulations adopted by the prior Commission in 2015, network investment declined for two straight years, the first time that had happened outside of a recession in the broadband era.”

Except that is, again, not even remotely true. For one, ISPs spent years technically under Title II (cable until 2002 and DSL until 2005) without the sky falling. That was until FCC boss Mike Powell (now the top lobbyist for the cable industry) decided to weaken FCC oversight over broadband monopolies under the bullshit claim it would result in a broadband competition utopia (you may have noticed that didn’t happen). Companies like Verizon also like to ignore the fact they were just fine having parts of their businesses regulated under Title II for years–when it was providing the company with notable tax breaks.

And when the FCC did reclassify ISPs as common carriers again under Title II in 2015, the agency used forbearance to prevent applying many of the heavier, utility-style regulations upon ISPs. The FCC also went well out of its way to make it clear that it had no intention of seriously regulating broadband rates, a gift to ISPs that have been abusing their monopoly markets via price hikes and obnoxious fees for nearly two decades now. In short: Title II was never the bogeyman it was portrayed as, and many ISPs were just fine with Title II — when it fit their political and financial argument du jour.

As for the purported investment dip caused by Title II, numerous major ISPs like Comcast (who boosted CAPEX by 13 percent in 2015) reported an overall increase in investment during that period. At best investment (which is usually dictated by competition) remained flat. And while Ajit Pai has also tried to claim that the rules somehow placed an unfair financial burden on smaller ISPs, the agency’s own data disproves those claims as well. In fact, a coalition of thirty small ISPs opposed Pai’s historically-unpopular attack on the rules as counterproductive and harmful to a truly competitive internet.

Again, the only reports claiming that net neutrality hurt sector investment come from industry linked economists who intentionally cherry picked very specific, unrelated windows of investment slowdown (like scheduled cable box upgrades ending) and massaged the data to falsely imply net neutrality was to blame. Despite the fact these studies have been debunked by years of journalism and public admissions from the industry itself, Pai and ISP lobbyists enjoy repeating them in the apparent belief that repetition forges reality.

From there, Pai informed Congress that they no longer need to worry about this investment-killing bogeyman thanks to his Orwellian-named “Restoring Internet Freedom Order”:

“In the Restoring Internet Freedom Order, which was adopted last December, we stopped regulating the Internet with 1934 rules designed for the Ma Bell telephone monopoly. We strengthened our transparency rules so that broadband providers are required to disclose more information about their network management practices. And we restored the authority of the Federal Trade Commission, our nation?s premier consumer protection agency, to police the practices of Internet service providers?authority the prior Commission had stripped from the FTC in 2015.

You’ll be shocked to learn that Pai’s still not telling the truth here, either. This industry line that the FCC’s 2015 net neutrality rules were somehow “designed for the ma bell telephone monopoly” or impose “archaic, utility-style rules on modern networks” is decidedly false, as we’ve explained in great detail previously. The claim that ISP transparency rules have been “strengthened” is also false, since Pai effectively replaced tough ISP transparency requirements with the policy equivalent of a pinky swear. Pai’s FTC claims are also incorrect, since the FTC lacks the resources or authority to really police broadband providers effectively.

Of course this cavalcade of bullshit is nothing new for Pai, as we saw recently when he claimed that the majority of Americans support his attacks on net neutrality, something survey after survey (another of which was released this week) disproves. Of course countless reporters, citing publicly-available data, have been pointing all of this out for years, not that appears to matter in post-truth America. The bottom line is that net neutrality rules are dead, and Pai ignored the public, the experts, and relied entirely on garbage data to justify killing them. With zero substantive repercussions.

Eventually accountability will likely come for Pai, either in the form of the looming lawsuits by Mozilla and consumer groups, or the inevitable collision between his obvious post-FCC political aspirations and the Millennial voters who are vibrantly aware of just how badly his decision will screw them over the longer haul.

Filed Under: ajit pai, broadband investment, congress, fcc, investment, net neutrality