Shocker: ISPs Cut Back 2020 Investment Despite Tax Breaks, Death Of Net Neutrality

from the ill-communication dept

Why it's almost as if you can't take telecom giants (and their lawyers, consultants, and political allies) seriously.

If you recall, the broadband industry and the Trump FCC repeatedly proclaimed that modest consumer protections like net neutrality had dramatically stifled telecom sector investment, and were we to ease regulatory oversight of giants like AT&T and Verizon, it would result in a wave of new sector investment the likes of which we'd never seen before. Ignore the fact that data routinely disproved this claim; this "net neutrality stifled investment" claim was made almost daily by the telecom sector and the wide variety of mouthpieces paid (one way or another) to support them.

Funny thing about that. Despite just having received billions in tax breaks and regulatory favors, AT&T, Comcast, and Charter are all slated to lower their CAPEX and network investment significantly in 2020. Others 2020 CAPEX projections, like Verizon, were entirely flat. This static or reduced investment arrives despite the slow but steady deployment of 5G, the accelerated deployment of which was also a big cornerstone of the net neutrality repeal's justification:

"Comcast and Charter missed 3Q expectations for capex and guided 2019 lower than previously planned," wrote the analysts at Nomura's Instinet in a recent note to investors. "We have lowered our combined 2019 capex forecast for Comcast and Charter from $14.6 billion to $14.2 billion." And AT&T...surprised Wall Street analysts with a significantly lower-than-expected capex for 2020. The operator said it expects to spend around $20 billion on capex next year, which is way down from the $23 billion it expects to spend this year and the $22 billion that most Wall Street analysts had expected AT&T to spend in 2020."

Fewer jobs, higher prices, and lower investment was not what we were promised. It's the precise opposite of what the endless parade of telecom-linked think tankers, academics, consultants, and other hired mouthpieces claimed would happen. And it's certainly not what Ajit Pai said would happen when he recently told Congress net neutrality had a disastrous impact on sector investment, despite the fact that biggest study of its kind on the subject ever undertaken just last month showed that net neutrality had no meaningful impact on broadband investment levels whatsoever.

It's simply no longer debatable, and it's fairly telling to see which groups and individuals are still trying to push this line of debunked detritus.

Granted this is a con AT&T has been running on the American public for decades now. The company will proclaim that immense broadband deployment and employment gains can be made if the government just lobotomizes itself and does whatever AT&T is demanding at the moment (lower tax rate, fewer regulations, new regulations AT&T supports, merger approval, etc.). When the government inevitably follows through, AT&T's promises then mysteriously disappear. And like Lucy and Charlie Brown football, nobody in the US seems particularly interested in learning from the experience.

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Filed Under: broadband, capex, investment

Companies: at&t, comcast, verizon