Sorry Net Neutrality Chicken Littles, Title II & Net Neutrality Still Haven't Hurt Broadband Investment In The Slightest

from the the-sky-is-not-falling dept

It's the ISP lobbyist and think tank meme that simply won't die. ISPs of course predicted all manner of doom and gloom should net neutrality and Title II reclassification come to pass. Tubes were supposed to clog, innovation was supposed to die, and investment in broadband networks was supposed to shrivel up completely. Of course, none of that happened. Instead what we've seen is broadband investment actually spike, many of the companies feuding before the rules came to pass suddenly getting along beautifully, and Netflix streams that no longer suck thanks to the threat of a regulator actually doing its fucking job.

Of course, if you're a mega-ISP lobbyist or executive (or one of the millions of people paid to parrot their bullshit in one fashion or another) you can't admit that, lest you get kicked out of the ISP think tank astroturf adventure club.

So instead, we've seen everyone from ex-Verizon lawyers turned FCC Commissioners to Congressmen repeat the idea that Title II killed the broadband golden goose. As net neutrality opponents continue to hold a series of show pony hearings intended to shame the FCC for daring to stand up to ISPs, the claim that net neutrality is the anti-Viagra to sustained broadband spending continues to play front and center. Though entertainingly, even the "experts" that neutrality opponents have been inviting to DC to tell them what they want to hear have even started to balk:
"Robert Shapiro, co-founder Sonecon LLC, has predicted investment could eventually decline between 5 percent and 20 percent per year because of the rules. He said the rules will have a "substantial adverse effect" but noted that those who claim to know fully how the rules will affect investment are "talking through their hat." Michael Mandel of the Progressive Policy Institute similarly said, "We don't know now what is going to happen." The institute has previously blamed the rules for a decline in broadband capital expenditures in the first half of 2015, though others have disputed the cause."
The same Progressive Policy Institute claiming "we don't know what is going to happen," is the same organization that's been circulating a study by Hal Singer for months claiming that Title II was responsible for a 12% dip in network investment. That study has been popping up in everything from editorials to Congressional testimony for months. Except as we've already explored at length, Singer cherry-picked his data, including companies that were winding up major projects that had nothing to do with net neutrality (like AT&T's completion of "Project VIP" fiber upgrades, or Charter's finished digital cable conversion).

And indeed, the one or two people in the tech and telecom press that can be bothered to actually look at CAPEX numbers are discovering that lo and behold, investment is doing just fine:
"In the nine months ending September 30, Comcast said its "capital expenditures increased 12.8 percent to $5.9 billion compared to the prior year." The Q3 increases are primarily due to "increased spending on customer premise equipment related to the deployment of the X1 platform and wireless gateways and our ongoing investment to expand business services," Comcast said.

...Time Warner Cable, the nation's second biggest cable company after Comcast, reported today that its capital expenditures increased to $3.5 billion in the first nine months of 2015 due to efforts "to improve network reliability, upgrade older customer premise equipment and expand its network to additional residences, commercial buildings and cell towers."

...The new classification hasn't slowed mobile investment at Verizon, which is preparing for an upgrade to 5G and reported that its wireless capital investment is "$8.5 billion year to date, up 8.4 percent from a year ago." The increase was even more striking when comparing Q3 2014 to Q3 2015, with wireless capital spending going up 17.6 percent from $2.48 billion to $2.92 billion.
Anybody noticing a trend? And again, in the instances where an ISP did reduce spending, it was usually related to things that have jack shit to do with net neutrality, such as AT&T and Verizon's refusal to upgrade their DSL networks, or cable companies finishing up set top box deployment projects. Surely Hal Singer and the net neutrality chicken little band will be issuing statements admitting they were in error any day now? Of course not. What they'll do is insist that it's just too early to see the diabolical impact real net neutrality rules will have on the broadband sector. Then, in ten years, when there's still no impact (assuming the rules aren't sued into oblivion), these folks will be on to the next scary paymaster talking point, pretending they never made these predictions at all.

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  • identicon
    Anonymous Coward, 3 Nov 2015 @ 9:21am

    To be fair, however, it is still early on. These kinds of investments are planned years in advance, and were already well on the way to being implemented by the time Title II came along. What we need to watch for is the next couple of years and see what happens.

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

    • identicon
      Anonymous Coward, 3 Nov 2015 @ 9:24am

      Response to: Anonymous Coward on Nov 3rd, 2015 @ 9:21am

      shhh. don't wake karl up!

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

    • icon
      Karl Bode (profile), 3 Nov 2015 @ 9:42am

      Re:

      Right. Except there's NO INDICATION that's true whatsoever.

      "These kinds of investments are planned years in advance, and were already well on the way to being implemented by the time Title II came along."

      Years in advance, like during the period the government was planning net neutrality rules? Rules that should have scared away ISPs from heavy investment?

      It's a bunch of bullshit. Full stop.

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

    • icon
      Derek Kerton (profile), 3 Nov 2015 @ 12:23pm

      Re:

      Not so. We don't have to wait years to prove that Hal Singer's predictions were BS. Here's why:

      1) The doom-and-gloom predictions were that there would be an immediate and dramatic drop in investment. In fact, the lobbyists were saying, prior to Title II, that the mere threat of possible Title II was already stifling CapEx. Thus, it is already proven wrong.

      2) Sure, we may have to wait 5 years or so to see the longer-term, and full effects of Title II. There may be some unintended negative consequences. But that's a more nuanced debate than the lobbyists ever made.

      "These kinds of investments are planned years in advance"

      BTW, Telco/MSO investments are NOT planned years in advance. They are very fluid year-by-year, based on new technologies, what competitors are offering, what happens to demand, the economy, price of K, the outcome of spectrum auctions, and yes, regulations.

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

  • identicon
    Anonymous Coward, 3 Nov 2015 @ 9:29am

    Then, in ten years, when there's still no impact (assuming the rules aren't sued into oblivion), these folks will be on to the next scary paymaster talking point, pretending they never made these predictions at all.
    That's a very optimistic view. I expect they'll be claiming their predictions did come true, and the world would be so much better if things had gone their way 10 years ago.

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

  • icon
    Ninja (profile), 3 Nov 2015 @ 9:32am

    You are the type of liar that would say that Home Taping did not kill music despite the deafening silence in these modern times. Obviously paid by Google, no? /troll

    I'm still waiting for Home Taping to kill music and downloadable cars to kill the studios.

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

  • icon
    TheResidentSkeptic (profile), 3 Nov 2015 @ 9:38am

    Well, you see...

    we WERE going to invest $20B - but since these rules are killing us, we're only able to invest $8B... see how horrible it is? Why, we'll barely make a profit (after campaign contributions, that is...)

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

    • icon
      ltlw0lf (profile), 4 Nov 2015 @ 8:11am

      Re: Well, you see...

      we WERE going to invest $20B - but since these rules are killing us, we're only able to invest $8B... see how horrible it is? Why, we'll barely make a profit (after campaign contributions, that is...)

      I know this is sarcasm, but I am not sure that companies like AT&T and Comcast *don't* actually believe this (at least their legal/political arms.)

      Considering the government has already invested at least $3.5 billion (just the rural broadband subsidies, that have yet to produce many connected people as has been discussed here in the past,) but probably far more in the "information superhighway" and "connecting America" deals, I suspect that most of what the government already invested went into their coffers and what little was actually paid in campaign contributions came from that,) I am not sure why they even can make this argument with a straight face.

      There have been numerous studies indicating that government subsidies of internet broadband is a waste of money, but I believe that most of these studies were flawed because elsewhere in the world, subsidies have paid off, just not here where government regulators have no backbone (or have been bribed not to,) and companies are greedy and manipulative in order to get the most handouts for the least amount of work done.

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

      • icon
        John David Galt (profile), 4 Nov 2015 @ 9:44am

        Re: Re: Well, you see...

        If government "invests" (actually forces you and me to invest OUR money) in anything, it means no one was willing to invest his own. If it were a worthwhile investment that would not need to happen.

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

        • icon
          Melab (profile), 4 Nov 2015 @ 2:41pm

          Re: Re: Re: Well, you see...

          If government "invests" (actually forces you and me to invest OUR money) in anything…


          Really? I've never noticed it.

          …it means no one was willing to invest his own.


          Maybe. Maybe not.

          If it were a worthwhile investment that would not need to happen.


          Non-sequitur.

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

  • identicon
    Anonymous Coward, 3 Nov 2015 @ 9:38am

    It certainly can't hurt investment more than the monopolies/douopolies and regulatory capture isps have in most markets already do

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

  • identicon
    Kevin, 3 Nov 2015 @ 12:48pm

    "Sorry Net Neutrality Chicken Littles, Title II & Net Neutrality Still Haven't Hurt Broadband Investment In The Slightest"

    Jeez. Give it a couple of years before claiming victory, huh? Obamacare didn't destroy healthcare until 2016-2017, and that was enacted 5 years ago!

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

  • icon
    John David Galt (profile), 3 Nov 2015 @ 1:37pm

    The author of this piece must be psychic...

    if he can count the amount of investments that did NOT occur because of NN. I call bullshit.

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

  • icon
    maj155 (profile), 3 Nov 2015 @ 3:30pm

    Uh, duh. We've had net neutrality for 25 years.

    cable broadband was regulated under title II until 2002, and dsl until 2005.

    Title II doesn't hurt investment at all--without net neutrality ISPs would be incentivized NOT to upgrade their networkds in order to sell prioritization. Companies always follow the profit incentive. That's capitalism.

    If you think net neutrality hurts network investment, you are either a telecom shill or an ill informed moron.

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

  • icon
    maj155 (profile), 3 Nov 2015 @ 3:30pm

    Uh, duh. We've had net neutrality for 25 years.

    cable broadband was regulated under title II until 2002, and dsl until 2005.

    Title II doesn't hurt investment at all--without net neutrality ISPs would be incentivized NOT to upgrade their networkds in order to sell prioritization. Companies always follow the profit incentive. That's capitalism.

    If you think net neutrality hurts network investment, you are either a telecom shill or an ill informed moron.

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


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