Massive Study Proves Once And For All That No, Net Neutrality Did Not Hurt Broadband Investment

from the ill-communication dept

The biggest study (pdf) ever of its kind has found that net neutrality rules had absolutely no impact on broadband investment whatsoever. The study took an incredibly detailed look at CAPEX data for more than 8,577 different companies (270+ of which were telecom providers) and concluded:

"The results of the paper are clear and should be both unsurprising and uncontroversial. The key finding is there were no impacts on telecommunication industry investment from the net neutrality policy changes. Neither the 2010 or 2015 US net neutrality rule changes had any causal impact on telecommunications investment."

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 justifying 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 last year by Pai during an FCC oversight hearing (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.

It didn't matter that several studies had shown this wasn't true. It didn't matter that journalists who had reviewed public earnings data found no evidence whatsoever to support the claim. It didn't even matter that CEOs for numerous ISPs were clearly on record telling investors the claim wasn't true. It was repeated over and over and over again by the telecom sector and loyal politicians like Pai in the hopes that repetition would somehow forge an alternative reality where what net neutrality opponents felt in their guts would become the indisputable truth.

Throughout the repeal, the Pai FCC repeatedly cited data from telecom lobbying firm US Telecom as gospel, at one point even directing reporters with questions directly to US Telecom lobbyists (that's bad, in case you're wondering). Last year, the group pushed a "study" proclaiming broadband investment had exploded in the wake of the repeal, somehow failing to even notice their study had a fatal flaw:

"Last year, telecom lobbying group US Telecom released a study it claimed showed that broadband investment had spiked dramatically in 2017 thanks to “positive consumer and innovation policies” and a “pro-growth regulatory approach” at the FCC. The problem? The FCC’s net neutrality rules weren’t formally repealed until June of 2018.

The entire mess speaks plainly to how lobbyists and the lawmakers who love them use repetition, friendly media outlets, and massaged industry-sponsored lobbyist and economist analysis to construct alternate realities that support anti-consumer, anti-innovation policies (like say, letting lumbering, anti-competitive telecom giants do whatever the hell they'd like). As we've noted a few times, it's important to understand that the "net neutrality repeal" didn't just kill net neutrality rules, it all but obliterated the FCC's ability to hold ISPs accountable for much of anything, which was the entire point.

And while the industry may have scored a victory on the front end, the choices made could still come home to roost. Three different major FCC policy efforts have been shot down by the courts in as many months for failing to provide hard evidence actually supporting the decision. Given 23 state AGs have sued the FCC claiming the net neutrality repeal was similarly flawed, plenty of folks are curious if the FCC's net neutrality repeal will soon share a similar fate.

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Filed Under: ajit pai, broadband, competition, fcc, investment, net neutrality, study