Verizon Just Obliterated Ajit Pai's Justification For Killing Net Neutrality

from the ill-communication dept

If you'll recall, FCC boss Ajit Pai has spent the better part of the last few years insisting that giving the telecom industry whatever it wants will somehow magically boost sector investment, jobs, and competition. Of course if you've paid attention to history you'll probably notice that in telecom, it never actually works that way. Former FCC boss Mike Powell (now the top lobbyist for the cable industry) engaged in much of the same behavior in the early aughts, promising that if you obliterate consumer protections and regulatory oversight of ISPs, telecom Uptopia magically springs forth from the sidewalk. Instead, we got Comcast.

It's a cycle of dysfunction Americans just can't seem to learn anything from.

Since the start of his tenure, Ajit Pai and the GOP have taken a flamethrower to numerous, basic consumer protections ranging from basic privacy rules governing the sale and collection of your private data, to net neutrality rules that protect consumers and competitors from being nickel-and-dimed by lumbering telecom monopolies. He's also attacked efforts to bring competition to cable boxes, has slowly dismantled broadband programs for the poor, attacked states rights' to protect consumers or build their own networks, and basically neutered the FCC's ability to protect you from monopoly power.

More recently, you'll recall the massive tax cuts were supposed to spur investment, the telecom sector included. As was Ajit Pai's recent policy order neutering local authority over cellular tower placement. Both, like net neutrality, were supposed to result in a dramatic spike in next-gen "5G" network deployment, and a big boost in sector investment overall. This week, Verizon made it clear that none of those things would actually be happening, despite the $2 billion in savings Pai's 5G "reform" alone provided Verizon:

"Verizon Wireless says it will not move faster on building its 5G cellular network despite a Federal Communications Commission decision that erased $2 billion dollars' worth of fees for the purpose of spurring faster 5G deployment...in an earnings call last week, Verizon CFO Matt Ellis told investors that the FCC decision won't have any effect on the speed of its 5G deployment. Verizon also said that it is reducing overall capital expenditures—despite a variety of FCC decisions, including the net neutrality repeal, that the FCC claimed would increase broadband network investment .

That net neutrality hampered broadband industry investment has been the cornerstone of Ajit Pai's entire justification for removing those rules, despite this claim never being adequately supported by the facts. Again, that claim was directly contradicted by SEC filings, earnings reports, and more than a dozen public CEO statements. And here it is again being disproved by the industry itself, just as they were by Powell's empty promises in the early aughts. All the bogus, massaged ISP economist claims to the contrary can't save this turd of an argument when the evidence is sitting right in front of you.

Telecom sector investment doesn't magically explode just because you let AT&T, Verizon, and Comcast directly dictate your tech policy agenda. Gutting essential consumer protections doesn't magically "unhinder the free market," it simply lets lumbering, politically-powerful giants double down on a generation of nickel-and-diming captive customers, with neither regulatory oversight nor healthy competition acting as guide rails.

Targeted deregulation can help healthy markets if it's aimed at eliminating bureaucracy that hinders competition or innovation, but anybody claiming that mindless deregulation can cure telecom either is lying to you for financial gain, or doesn't understand how the U.S. telecom market works. People tend to take Libertarian or free market theories cultivated from other sectors, and apply them to a telecom sector that's uniquely broken and corrupt, failing to understand that blind deregulation won't work here. Steadily weakened antitrust protections similarly aren't the panacea these folks believe.

What the telecom sector desperately needs is even-handed, intelligent tech policy and regulatory solutions with an unwavering focus on one thing: driving broadband competition in whatever form that takes. There's a million ways to accomplish this, from eliminating ISP-written, protectionist state laws banning your town and city from exploring creative alternatives to purely private networks (like public/private options), to actually holding giant ISPs accountable when they try to hamstring both direct broadband or streaming video competitors.

What you don't do is let companies with an obvious, vested interest in less competition and no guard rails completely dictate tech policy, then repeatedly lie about the amazing net benefits this mindless fealty will have. For whatever reason, despite history repeatedly and painfully illustrating the perils of this approach in the form of some of the worst service of any kind available in America (call Comcast customer support or spend a week using a West Virginian Frontier DSL line if you need first-hand experience on this front), it's a lesson the United States stubbornly refuses to learn.

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Filed Under: 5g, ajit pai, capital expenditure, deregulation, fcc, investment, net neutrality, regulation

Companies: verizon