More Evidence FCC Claims That Killing Net Neutrality Would Boost Broadband Investment Were Bullshit
Since the very beginning of the net neutrality debate, ISPs have repeatedly proclaimed that net neutrality rules (read: stopgap rules crafted in the absence of competition to stop giant monopolies from abusing their power) utterly demolished broadband sector investment. It was a primary talking point during the battle over the 2010 rules, and was foundational in the Ajit Pai FCC’s arguments justif
ying their hugely unpopular and fraud prone repeal.
Time after time after time, big ISPs and the politicians paid to love them insisted that the rules had crushed sector investment, and repealing them would result in a massive spike in broadband investment. It was a line repeated again by Pai during an FCC oversight hearing in 2018 (for those interested he wasn’t under oath, which applies only to Judiciary hearings):
“Under the heavy-handed regulations adopted by the prior Commission in 2015, network investment declined for two straight years, the first time that had happened outside of a recession in the broadband era…we now have a regulatory framework in place that is encouraging the private sector to make the investments necessary to bring better, faster, and cheaper broadband to more Americans.”
The problem: a mountain of data continues to make it extremely clear that none of this was ever true.
Numerous studies, earnings reports, and CEO statements had already demolished the claim, yet like a relentless zombie, it simply refuses to die. To this day it remains a core talking point of the outgoing Ajit Pai FCC, most telecom lobbyists, and the absolute army of think tankers, consultants, and academics employed by incumbent telecom giants to pretend the U.S. broadband market is healthy and competitive.
This week, SP Global took a closer look at U.S. network investment numbers and found, once again, that claims that repealing network neutrality boosted investment to be bullshit. In fact, the firm found that annual investment in fixed U.S. broadband networks is poised to have dropped 7 percent since 2016:
Getting rid of Net Neutrality (Trumps FCC) was supposed to boost incentives to invest in broadband. Guess what? In our hour of greatest need, investment way down since 2016 ! It was just another pack of lies pic.twitter.com/Spl6cfOSRr
Tim Wu (@superwuster) November 19, 2020
Granted the telecom sector has been in the U.S. government’s driver’s seat under the Trump administration. In just four short years the industry successfully had broadband privacy rules killed (thanks to GOP Senators), net neutrality rules killed, FCC authority over telecom monopolies kneecapped, and the sector received billions in tax breaks in exchange for doing absolutely nothing. The telecom sector even managed to convince most of DC that “big tech” monopolies are the only monopolies in tech worth worrying about. All in all, a pretty good four years for one of the least liked, least competitive sectors in U.S. industry.
All of this industry ass kissing would, to hear industry and loyal lawmakers tell it, boost network investment, increase employment, and drive more innovation and competition to market. None of that happened. Why? Because when you eliminate all meaningful oversight from a broken, monopolized sector, the companies involved simply double down on the same bad behaviors (layoffs, price hikes, less investment in infrastructure and customer support). Yet for whatever reason, we cling desperately to “free market” narratives that don’t apply to a broken sector that sees little real competition and has an unrelenting political stranglehold on both state and federal leaders. No competition and no oversight means more of the same problems.
Of course the sagging investment, eroded regulatory authority, and tens of thousands of layoffs come just as a raging pandemic showcases how broadband (and objective federal leadership on broadband) is more essential than ever. And cocksure policy pundits or campaign-contribution-slathered lawmakers won’t learn much of anything from the experience, because there will be absolutely no penalty whatsoever for pushing bullshit narratives or relentlessly kissing the ass of a broken, monopolized market.
Author: Karl Bode
Date: 2020-11-20
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