AT&T, Comcast Dramatically Cut Network Spending Despite Net Neutrality Repeal

from the credibility-problem dept

Comcast cut back on network investment in 2019 despite repeated claims that killing net neutrality (and neutering the FCC in general) would have the exact opposite impact. With the company's fourth quarter earnings now in the books, it's clear that the company's cable and broadband division overall CAPEX dropped in 2019 by roughly 10.5%. Comcast reports cable division CAPEX in four categories, and investment dropped in three out of four of them:

"Comcast reports cable-division capital expenditures in four categories, and its full-year spending dropped in three of them. Comcast spending on line extensions—defined as "costs associated with entering new service areas... includ[ing] fiber and coaxial extensions"—dropped from $1.5 billion in 2018 to $1.4 billion in 2019. Comcast spending on "scalable infrastructure," which provides additional bandwidth and other service improvements, dropped from $2.6 billion to $2 billion. Spending on customer-premises equipment dropped from $2.9 billion to $2.7 billion."

Granted that's the exact opposite of what Comcast lobbyists and Ajit Pai's FCC said would happen when it neutered the FCC at telecom lobbyist behest. The public was told more times that we could count that the FCC's fairly modest (by international standards) net neutrality rules had all but demolished network investment, despite absolutely no evidence that was actually true. The industry and its allies at the Trump FCC then insisted network investment would soar post net neutrality repeal, something that pretty clearly isn't happening:

"Comcast isn't the only major ISP cutting investment, as AT&T projects that it will reduce capital spending from $23 billion in 2019 to $20 billion in 2020. Charter Communications said in October that its capital expenditures excluding mobile services would total $7 billion in 2019, down from $8.9 billion in 2018. Verizon also reported a capital-expenditure decline in the first nine months of 2019."

AT&T also released its earnings this week (pdf), which showed that AT&T's CAPEX has been steadily dropping since 2006, and its fourth quarter CAPEX specifically dropped to $3.9 billion--the lowest total in nearly a decade:

AT&T $T capital spending (network and facility upgrade expenses) dropped to $3.8 billion the lowest level in nearly a decade. https://t.co/NevlRIePVI pic.twitter.com/sJrFbmaOSw — Scott Moritz (@MoritzDispatch) January 29, 2020

Propped up by a chorus of telecom-linked think tankers and other "very serious policy voices," the Trump administration doled out billions in massive tax cuts and regulatory favors to the nation's biggest telecom companies, and all taxpayers got in return were some empty promises and a significant pile of bullshit. And so far, there's been absolutely no effort, on any front, to hold anybody accountable for any of it.

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Filed Under: capital expenditure, competition, fcc, net neutrality, network spending

Companies: at&t, comcast