Anybody Claiming Net Neutrality Rules Killed Broadband Investment Is Lying To You

from the chicken-little-for-hire dept

In 2015 the FCC passed some fairly basic net neutrality rules designed to keep broadband duopolies from abusing a lack of broadband competition to hamstring internet competitors. Despite the endless pearl clutching from ISP lobbyists and allies, the rules were relatively modest, falling well short of the more comprehensive rules we've seen passed in places like Canada, Japan, and India. Still, ISPs have spent every day since trying to claim that the rules somehow utterly devastated broadband sector investment, despite the fact that independent economists and journalists have repeatedly proven that to be a lie.

That lie, of course, has been the cornerstone of Trump FCC head Ajit Pai's assault on net neutrality rules and the court sanctioned Title II classification being used to support them. Pai has repeatedly tried to claim that sector investment is at at all time low due to the FCC's fairly tepid net neutrality protections. But again, multi-billion-dollar spectrum purchases, billion-dollar gigabit fiber deployments, and the hundreds of billions being tossed around on megamergers all say otherwise.

The latest case in point: a new report by Deutsche Bank Markets Research highlights how the same ISPs that claim broadband investment is in the tank are spending hundreds of billions of dollars on the fiber needed to fuel fifth-generation wireless (5G) and smart city IoT technologies. AT&T and Verizon, usually the first companies you'll see whining about how net neutrality ruined Christmas, are at the front of the pack:

“Telecoms have become much more public signaling their intent to increase fiber investment, with AT&T and Verizon leading the spending ramp,” said Deutsche Bank Markets Research..."After establishing its “One Fiber” initiative, Verizon signed two key fiber supply deals: it will spend $1 billion with Corning to buy 1.5 million miles of fiber over three years and a $300 million deal with Prysmian to buy 1 million miles of fiber over 3 years. AT&T is being no less aggressive....What’s driving the ongoing fiber expansion plans is the ongoing mission to have converged networks that simultaneously support FTTH and 5G wireless services.

Verizon and AT&T's investment is paralleled by France's Altice, which has been gobbling up US cable companies and plans to upgrade their entire footprint to fiber to the home over the next few years (clearly net neutrality rules simply terrified them). Comcast, another big pusher of the investment apocalypse narrative, is also tripping over itself to spend millions on additional fiber and DOCSIS 3.1 upgrades. All told, the bank estimates that this investment explosion should reach $175 billion over the next decade as these companies position themselves for the wireless smart cities of tomorrow. And it's only accelerating:

"Deutsche Bank said in order achieve these goals, its “proprietary top-down fiber model suggests spending on fiber to the home will total ~$175B over the next decade (an additional $25-30B will likely go towards 5G).” Verizon and AT&T are clearly leading this charge with plans to either build out and augment existing fiber routes by building their own facilities, renting, or purchasing regional assets. “Telecom/cable companies are increasingly talking about the convergence of fiber to the home and the 5G rollout as one large investment cycle that will likely ramp further in 2018,” Deutsche Bank said.

That is, if you're playing along at home, not a fucking slowdown, and anybody that continues to push this flimsy narrative is either lying to you, or has been duped by years of lobbyist nonsense. Of course industry executives have been quietly admitting the net neutrality induced investment apocalypse has been bullshit all along, but with their other hand they've been paying an army of economists, astroturfers, think tankers, fauxcademics and other policy voices to claim otherwise -- all in the hopes of gutting what's already tepid regulatory oversight of one the least competitive industries in America.


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  • identicon
    David, 6 Oct 2017 @ 7:05am

    I don't see that.

    Net neutrality certainly had an impact on the balance of broadband investment return of interest. So definitely it might have been detrimental to some broadband investments.

    It's just that when you are looking at generally available and affordable broadband that net neutrality is a net win.

    And the U.S. political system does not provide much opportunity for bait-and-switch games some socialist to communist countries can engage in by first letting companies build infrastructure for their own purposes, then confiscate it.

    So there is not much of a point in encouraging broadband investment not available to common people or under reasonably generic terms.

    Net neutrality puts down clear rules from the start and clear rules preclude murky paths from being taken. So yes, some investments do not happen. That isn't bad in itself.

    reply to this | link to this | view in chronology ]

    • icon
      orbitalinsertion (profile), 6 Oct 2017 @ 7:31am

      Re: I don't see that.

      _And the U.S. political system does not provide much opportunity for bait-and-switch games some socialist to communist countries can engage in by first letting companies build infrastructure for their own purposes, then confiscate it._

      I think you mean, build large operations at taxpayer expense and then hand them over to ridiculously awful capitalist cronies for practically nothing.

      Bad socialism isn't any worse than bad capitalism.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 6 Oct 2017 @ 10:14am

        Re: Re: I don't see that.

        "Bad socialism isn't any worse than bad capitalism."

        You can't convince any C-Suite folk of this

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 6 Oct 2017 @ 11:24am

          Re: Re: Re: I don't see that.

          why should they need the convincing?

          they just do what the law allows, the convincing needs to be done to the citizens, the folks that vote for their corrupt as leaders.

          reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 6 Oct 2017 @ 11:02am

      Re: I don't see that.

      "definitely it might have been". I should have stopped right there. This article is trying to respond to nebulous claims like these with facts and figures and yet after reading it you just go right back to what you thought before you read it.

      there is a difference between investment and return of investment which is what i think you meant to say. does net neutrality potentially limit ROI? of course, it limits the crazy tactics ISPs might use to get more revenue from people. Does it stop ISPs from investing in their own industry? abso-fucking-lutely-not.

      reply to this | link to this | view in chronology ]

  • icon
    Toom1275 (profile), 6 Oct 2017 @ 7:24am

    Just some other points:

    As I think Techdirt has already covered, Broadband companies' own statements to their shareholders states that Title II has no harmful financial effect on them. So either the claim of harm is false, or they all committed securities fraud.

    Another one, is that all of the investment harm Pai's talking about in his false narrative happened before Title II passed. Infrastructure investment hit a big slowdown as 3G network deployment wrapped up. Once all the equipment's in place, there's of course no immediate need to pay for a bunch more.

    reply to this | link to this | view in chronology ]

  • icon
    orbitalinsertion (profile), 6 Oct 2017 @ 7:28am

    Oh yay, smart cities, wheee.

    Sure they will lay the fiber that should have been there 20 years ago if they can sell their stupid 5G at exorbitant rates and suck taxes dry over internet of broken cities charges while getting kickbacks from vendors of IoT trash.

    I think the best thing about the theoretical smart-city is that, if the stuff ever works, it won't make anything better or more efficient, it will simply enable more control and abuse. Awesome.

    Just finish laying the dumb pipe and go away. Or just go away. We are already living in someone's bad fiction dystopian future.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Oct 2017 @ 7:29am

    Regulation

    Regulation forced the creation of the monopolies out of fear that Capitalism would create them. Of course you will need NN rules to manage it, and of course the Capitalists are going to buy your politicians.

    It has been the cycle since the beginning of government.

    first "create" a problem, then campaign on solutions for them!
    Idiot voters act like they know what is going on and voila.... you have the here and now.

    reply to this | link to this | view in chronology ]

    • icon
      orbitalinsertion (profile), 6 Oct 2017 @ 7:38am

      Re: Regulation

      IKR? I wish we would stop electing bad actors to the FCC.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 6 Oct 2017 @ 7:52am

        Re: Re: Regulation

        The people we elect put them there.

        Which means... yes, it is the voters problem still.
        Your ignorance and willingness to give YOUR dirty rotten ass corrupt politician a pass is what created this problem.

        The root issue has been, and will always be the general apathy or malaise without a will to change, of the voters.

        reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 6 Oct 2017 @ 10:22am

      Re: Regulation

      "Regulation forced the creation of the monopolies"

      Please explain this in detail. Public utilities have been around for some time, are you claiming that they were the result of regulation even back in the stone ages? I would believe the watering hole was fought over but not regulated until there was some overlord who allowed the opposition to drink from his well. So it is benevolence that leads to regulation - not monopoly. The overlord has a monopoly upon said well, but does not need to share. He shares only because he is not sure he can stop the inevitable revolution.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 6 Oct 2017 @ 11:19am

        Re: Re: Regulation

        Yes, the FCC was on record during it's creation to explicitly regulate the Telco's as natural monopolies. Instead of enforcing anti-monopoly law they just straight into bed with telecom from literally day 1.

        The corruption then might not be as bad as it is now, but it is pretty clear how the telco monopolies got started. What is amazing is that people do not know these readily available facts.

        The FCC was established in 1934
        The Ma Bell breakup was around 1982-83
        Bell had a monopoly starting 1977 ish

        The FCC currently allows and blesses carved up monopoly fiefdoms for most of the US which is why most people only have 1 broadband option available to them.


        "So it is benevolence that leads to regulation - not monopoly."

        That statement reveals an exceptional amount of ignorance.

        #1. Monopoly is regulation itself, just through the owning company instead of government.
        #2. regulation can "potentially" be a product of benevolence, apathy, or malevolence, it is not a guaranteed result.

        You have revealed much about your limits regarding this subject!

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 6 Oct 2017 @ 1:38pm

          Re: Re: Re: Regulation

          I'm ignorant - yup, this is true.

          You however, apparently lack the ability to see beyond your blinders.

          Funny how you take a comment and use it as an example of how ignorant someone is ...... and then later on in your same comment you proudly proclaim what was said in that comment is correct.

          Monopoly is not regulation ... but I am the ignorant one.

          So, when Orc the caveman declared the water hole to be all his and no one else could use it .... was this the first monopoly or the first regulation?

          reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 7 Oct 2017 @ 2:27pm

          Re: Re: Re: Regulation

          How many times do you need to be told to stop drinking the paint before you post.

          reply to this | link to this | view in chronology ]

        • identicon
          Crazy Glue, 9 Oct 2017 @ 5:32am

          Re: Re: Re: Regulation

          The Ma Bell breakup was around 1982-83

          "MA Bell IS A CHEAP MOTHER"

          I praise you brother Anon. for your FCC historic skills.

          FCC is the Wreckin Crew.

          Somehow the missions statement has been re-done to make it be the "cheapest service" as opposed to the best management of the public spectrum in the public interest by the best engineers thinking hard on where signals ought to be in the spectrum. Like that broadband over powerlines beating the hell out of HAMS. Oh yeah we can notch filter till the COWS come home, it's not the POINT! it's POOR engineering in the public interest because someone wants a DAMNED PROFIT. The original mission statement has been replaced with a bunch of Mini Mission statements. these all feel like sales receipts to me.

          First Visualize the Electomagnetic Sea of Death, then how you manage this nightmare?

          reply to this | link to this | view in chronology ]

  • icon
    Ninja (profile), 6 Oct 2017 @ 8:06am

    If you turn the chart upside down the investment is falling, problem solved. Move ahead with the plans, I need more monies to stuff in my ears, some of the noise from the citizens is still leaking inside. - Ajit Pai

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Oct 2017 @ 11:17am

    I have a few miles of fiber I deal with. The fiber is 20+ years old but it was to a standard. It was originally 100 Mbps when it was built. Then it was 1 Gbps. This year I am upgrading to 10 Gbps. The only thing that has changed is equipment and the patch cables. Not the fiber runs. Untested but I believe I can run 100 Gbps across it too. Uses the same nm size on the fiber. Only $11k for a 32 port 100 Gbps fiber switch and optics are cheap too. Bargain basement for the cost of a 1 gbps many years ago.

    reply to this | link to this | view in chronology ]

  • identicon
    Crazy Glue, 9 Oct 2017 @ 5:21am

    I told you not to allow the FCC

    I told you not to allow the FCC to do their mission creep on your cat5.

    The FCC tossed out their Original mission statement, It's been downhill ever since. They only expanded it from power and frequency to power and frequency and your CAT5 Cable

    reply to this | link to this | view in chronology ]


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