Comcast Network Investment Drops Despite Repeated Claims Killing Net Neutrality Would Trigger Investment Wave

from the ill-communication dept

Why it’s almost as if the Ajit Pai FCC and broadband industry haven’t been entirely honest with us.

This week we noted how Wall Street is predicting that the telco and cable industries will see notable declines in network investment next year, despite the FCC and industry’s repeated, breathless claims that killing net neutrality would somehow spur network investment. This, as we’ve long noted, was based on the bogus industry claim that net neutrality somehow stifled such investment, a claim repeatedly disproven by public SEC filings, earnings reports, and even statements by more than a dozen major ISP CEOs.

Almost as if on cue, Comcast released the company’s latest earnings report showing, you guessed it, that the company saw a 3% dip in cable network CAPEX last quarter despite all of that sweet, potent, “internet freedom” Ajit Pai claims to have been spreading around:

“Comcast’s cable division spent 3 percent less on capital expenditures last year, despite promises that the repeal of net neutrality rules would boost broadband network investment. Comcast’s cable division spent $7.95 billion on capital expenditures during calendar year 2017, but that fell to $7.72 billion in the 12 months ending on December 31, 2018.”

That is, if you’re playing a long at home, precisely the opposite of what Comcast and other large ISPs repeatedly proclaimed while successfully convincing the FCC to effectively neuter itself, shoveling any remaining authority to an FTC that lacks the authority or attention span to police bad actors in telecom. In 2014, for example, Comcast repeatedly proclaimed that the FCC’s net neutrality rules (arguably modest by international standards) would devastate job creation, network investment, and innovation:

“The sheer uncertainty surrounding such a regulatory environment would produce ?a profoundly negative impact on capital investment.? By itself, reduced investment would inhibit job creation, hinder the deployment of broadband infrastructure, and undermine the ?virtuous circle? of innovation that the open Internet rules are designed to advance.”

By that logic, the inverse should have happened in the wake of the repeal. Instead, facing the one-two punch of little broadband competition and little real oversight of a growing natural monopoly, Comcast and other ISPs did what everybody knew they’d do, pass that savings on to investors and executives, instead of shoring up their networks or historically terrible customer support. All while raising rates higher and higher. And, oh, laying off employees despite nabbing billions in both Trump era tax cuts and regulatory favors, the financial impact of the latter is largely incalculable.

None of this was hard to predict, especially if you’ve studied history (especially telecom history). This is the same pattern has played out time and time again in telecom. Promise the earth, sea, and sky in exchange for taxpayer subsidies, tax breaks, and regulatory favors, then use the regulatory capture to double down on all of the industry’s worst habits. By the time the press and public has figured out you’re full of shit, you’re off to the next PR ploy, which, in Comcast’s case, involves pushing for regulation that hamstrings online ad players you desperately want to compete with in the streaming ad wars to come.

You’d like to think this is a cycle of dysfunction we’d eventually learn our way out of, but there’s simply no indication that’s occurring any time soon.

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Companies: comcast

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Comments on “Comcast Network Investment Drops Despite Repeated Claims Killing Net Neutrality Would Trigger Investment Wave”

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20 Comments
Daniel McKimm (profile) says:

Re: Re: Starlink will need to compete

Open Access is the only bipartisan solution that can bring ideologies, political parties, races, genders, colors on to a common ground, absent of course the crony capitalist incumbent ISPs. Their business model transcends anything other than their ownership rights to the virtual highway involving any and all digital access to and from your home, business and every digitally connected device you touch.

Open Access via community owned fiber is our only chance to gain bipartisan support for saving Internet access from these monopolists. http://www.entpnt.com http://www.ilsr.org http://www.muninetworks.org

Anonymous Coward says:

The only solution

Clearly, the only solution is for Pai’s FCC is to give Comcast, Verizon, and other big Telco’s more subsidies, tax breaks, and reduced regulatory “burdens” to increase their capital expenditures.

I am sure this time it will work. But we will make them double promise to spend it on infrastructure. Nobody can break a double promise.

/s

David says:

That does not prove Ajit Pai wrong

He said that Net Neutrality was stifling investments, and this stifling of course expressed itself as additional costs for doing such investments. So the humongous amounts of money that have gone into meeting net neutrality requirements according to the letter of the regulation are now actually gone from the investment costs. Nevertheless, the total amount, now actually going towards improvements of the network rather than placating regulatory protocol, has only fallen by 3%, far less than offsetting the damage previously caused by Net Neutrality cost.

Man, I should do this for a living. Too bad my nose is already on the long side.

Anonymous Coward says:

Re: That does not prove Ajit Pai wrong

the humongous amounts of money that have gone into meeting net neutrality requirements

lolwut? Net Neutrality requirements were to do nothing. There was no additional costs. In fact, NN was aimed at stopping network prioritization, something that costs a lot of money to implement and operate. NN saved money.

You’ve clearly swallowed the party line and the false narrative supporting it.

ECA (profile) says:

Investment

Investment is an internal thing..
If they want to FIX things inside a corp…Stockholders may take a hit. Or run away.
To many corps are just bill collectors, and repair isnt part of that. this is why it takes 2-6 weeks to get things done in this country.
And WHY, there was a bill to Force corps to PAY, persons that were 24hrs on call..for THAT 24hours..

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