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.


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  • This comment has been flagged by the community. Click here to show it
    identicon
    Anonymous Coward, 27 Dec 2017 @ 10:55am

    Yeah, if you'll read first blockquote without bias, isn't tied to tax cut.

    Just repeating. "ALSO" is standard practice, lump in all available good news at every chance.

    YOUR bias imagines up a NOTHINGBURGER yet again.

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

    • identicon
      Anonymous Coward, 27 Dec 2017 @ 11:21am

      Re: Yeah, if you'll read first blockquote without bias, isn't tied to tax cut.

      You do remember the difference between a fact and an opinion, right?

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

    • identicon
      Anonymous Coward, 27 Dec 2017 @ 11:50am

      Re: Yeah, if you'll read first blockquote without bias, isn't tied to tax cut.

      Actually, if you want to debias things he is specifically targeting the gullible media who makes the connection between the bonuses/investments and the tax-reduction/net neutrality removal. But I am not sure that was your intent?

      The post-factual way to do things is to attack a target no matter how silly your weapons are. Nobody cares the least about building anything, since attacking an idea has unlimited arguments, while defending needs context. Stick to attacking! If the adversary tilts or you have a stronger platform for fighting the war, you win! Bias is a bitch we all serve, but today some serve it unquestioningly and unconditionally. Politics in particular has no good or winners today. Question is who stands out as the bigger evil or loser...

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

  • icon
    Ninja (profile), 27 Dec 2017 @ 11:34am

    Plenty of dogs salivating over the tasty nothing they are getting as the very first comment here illustrates. Still, it's good to see some folks waking up to all the fireworks these companies throw to divert attention from their own empty rhetoric.

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

  • identicon
    Anonymous Coward, 27 Dec 2017 @ 11:35am

    Heh - yeah, AT&T also said something similar and then laid off a few thousand workers right before Christmas.

    Happy Holidays mofos

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

  • icon
    ECA (profile), 27 Dec 2017 @ 11:44am

    sTRANGE..

    "Company would award special $1,000 bonuses to more than one hundred thousand eligible frontline and non-executive employees."

    Umm, no designated relation to WHOM they are giving the money..
    A 3rd party company, they created, to LOOK GOOD, and do the installations??
    $1000/52, /40 hours..wow, A FEW are getting a $0.50 raise..
    $1000X 100,000,000?(ALLOT OF EMPLOYEES?)(ALLOT OF 3RD PARTY EMPLOYEES, Hired to do sales) $100,000,000..
    Making things look Good on the top..but Min wage SUCKS..and they will probably get it all back from those employees after TAXES.
    So, we cut the taxes and will probably get a Affect of a 0.01% increase in Productivity??
    Does this sound better then DROPPING the prices by $10 per household??

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

    • identicon
      Chuck, 27 Dec 2017 @ 12:24pm

      Re: sTRANGE..

      Oh, it's worse than that. Exactly zero dollars from this tax cut are going to the AT&T employee bonuses. Instead, they have announced they plan to lay off over 1,000 employees next month (January 2018). The elimination of their entire paychecks is where the slight raise for the remaining employees will come from.

      No, 100% of the tax cut is going to board members and shareholders. Every last penny.

      Remember, these guys - AT&T and Comcast - have nearly 40% dark fiber sitting in the ground right now. It's a matter of them slipping a damn switch. Unless they're investing a billion dollars in writing a single shell script to make flipping the switch easier, they have no need to spend money on anything.

      But alas, if they did that, it'd upset the duopoly. No sense killing the cash cow, ESPECIALLY now that there's no regulations to make them.

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

      • icon
        ECA (profile), 27 Dec 2017 @ 8:39pm

        Re: Re: sTRANGE..

        i HATE BEING 1/2 RIGHT..ITS AS BAD AS BEING aLL RIGHT..

        Why do we see this, and the Corps are still in Business..
        We see the corruption and manipulation..WHO DOESNT??

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

  • identicon
    Anonymous Coward, 27 Dec 2017 @ 11:52am

    Can we please let the term "nothingburger" die along with Hillary Clinton's presidential hopes? It was cringeworthy then, and it's still cringeworthy now.

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

  • identicon
    Anonymous Coward, 27 Dec 2017 @ 2:23pm

    By the time I concluded researching and purchasing my first cell phone in the early '90s I had determined that all user-facing tech companies were manned by ignorant horse's asses

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

  • identicon
    Anonymous Coward, 28 Dec 2017 @ 3:16am

    I saw the word IF hiding in there.

    A whole story based on a bad assumption.

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

  • icon
    MyNameHere (profile), 29 Dec 2017 @ 1:50am

    Wow.

    Since we have already established in the past that Comcast has increased their investments based on choices they made 3 to 5 years ago, to support their X1 box. So:

    "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."

    There is no indication that they will do so. They are 3 years or so into rolling out the X1, which required more IP network speed to support. However, at the point that the roll out is complete, that invest will be done and things will likely return to normal.

    So the entire piece is based on ignoring the concept that technology investments at this level are made far in advance, in this case long before NN came around the bend.

    But hey, keep going. It's fun to watch you build your castle on such a wobbly foundation.

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

    • identicon
      Wendy Cockcroft, 29 Dec 2017 @ 7:23am

      Re: Wow.

      And I after giving you an Insightful vote for a comment made on another post...! RTFA, MyNameHere.

      **...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...**

      Did you see the phrase that pays? Karl ALREADY stated that they'd planned this well in advance, but were CREDITING the tax plan and the ending of NN to get it done.

      You're welcome.

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

    • icon
      Toom1275 (profile), 29 Dec 2017 @ 7:34am

      Re: Wow.

      Perhaps you shouldn't talk about unstable foundations with that big hole in yours.

      Your whole "there's no indication they will do so after the end of X1" relies on he mistaken assumption that investment would fall and not reach that $50B mark after X1 is over.

      That completely ignores the part where Comcast is maintaining its investment level by turning it to its broadband, film, and theme park.

      With the death of NN not even on the books yet, it can't be said that those new projects suddenly popped up because its repeal. As you yourself admitted, the plans were made well in advance.

      Which is the entire point of the article - that investment going up and down is pretty much utterly decoupled from any regulatory changes at the time, NN included. Any time a company suggests anything otherwise is them being deliberately deceptive to try to influence politicians and other idiots.

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


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