FCC Commissioner Pai Is Dead Wrong on Investment and Net Neutrality

WASHINGTON — In a speech on Friday, FCC Commissioner Ajit Pai claimed that investment by larger Internet service providers had “flatlined” since the agency passed its Open Internet Order protecting Net Neutrality in February 2015.

Pai cited an industry-funded economist’s tweet to support his claim. The tweet draws on selective data that excludes certain investments from the actual total reported by the companies in their regulatory filings.

To show actual investment numbers, Free Press on Friday released analysis demonstrating that broadband-industry capital expenditures increased in 2015. Free Press’ analysis is based on a thorough review of these companies’ public statements as well as their quarterly and annual reports to the Securities and Exchange Commission.

The investment analysis is available here.

Free Press Research Director S. Derek Turner made the following statement:

“The broadband industry’s apocalyptic predictions about how the adoption of enforceable Net Neutrality rules would destroy the market have failed to materialize in the year since the FCC’s historic vote. Network investment is up. Revenues and profits are higher. And subscriber growth continues at a high level even as prices rise and the market nears saturation.

“None of this should come as a surprise as it reflects economic common sense and the sentiment ISPs themselves conveyed to the investment community both before the FCC’s vote and in the year since.

“Despite these facts, certain dead-enders like FCC Commissioner Ajit Pai are still peddling the false claim that broadband investment has flatlined and are still blaming the FCC’s Net Neutrality rules for this imaginary result. Commissioner Pai should pay closer attention to what the companies themselves are reporting to investors. If he did, he’d know that most ISPs are ramping up investment. He’d know that companies large and small — from Comcast to Cincinnati Bell — are increasing fiber deployments. And he’d know that among the few companies where spending is down, these declines are due to completion of prior deployments and are only temporary.

“Policymakers like Pai should stop going on about imaginary harms and start tackling real problems. Future threats to the U.S. broadband market come not from regulation, but from the consequences of market-power abuses that are likely to arise as the industry becomes more concentrated and less competitive.”