Big TelCos Slashed Investment Even After Net Neutrality Repeal

When Federal Communications Commission Chair Ajit Pai—a Donald Trump appointee and former corporate lawyer for the telecom giant Verizon—pushed for the rollback of Obama-era net neutrality rules, perhaps his central claim was that by removing the open internet regulations, big internet providers would be spurred to step up investment in their networks, providing faster speeds and smoother connectivity for internet users.

But according to a report by the tech site Ars Technica on Wednesday, exactly the opposite has happened. Citing newly filed financial reports, Ars Technica reported that the major broadband internet access providers Comcast and Charter Communications—the top two ISPs in America, respectively—both cut back their financial expenditures on new network technology in 2018.

The net neutrality rollback was approved by the FCC in December of 2017, and took effect in June of last year.  In 2018, despite a slight uptick in the final three months of 2018, Comcast cut overall investment in its networks by about three percent for 2018, from $7.95 billion the previous year, to $7.72 billion in the 12 months ending on December 31, 2018.

“Comcast’s network spending should have risen in 2018 if predictions from Federal Communications Commission Chairman Ajit Pai and Comcast had been correct,” wrote Ars Technica reporter Jon Brodkin. In fact, in February of last year, five months before the repeal became official, Pai claimed that ISPs were already stepping up investments in anticipation of the final repeal.

But that wasn’t true.

Charter and Comcast are expected to continue cutting back investment in their networks throughout 2019 as well, Ars Technica reported.

“Annual network spending isn’t necessarily a good indicator of whether broadband is expanding or getting better,” Brodkin noted. “Wireless network spending is likely to increase going forward as carriers upgrade from 4G to 5G networks, but the 5G upgrade would happen regardless of whether net neutrality rules are in effect.”

Photo By Shayne Dwyer/Wikimedia Commons 

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