Verizon: Our New Tax Cut Won't Accelerate Network Deployment

Verizon's shiny new tax cut courtesy of the Trump administration will not be put back into the network, according to the company's CTO. Verizon CTO Hans Vestberg told attendees of an investment conference that the reduction of Verizon's already controversially low tax payouts won't result in a corresponding increase in CAPEX or network investment, in contrast to some of the promises being made by AT&T and others. Vestberg says the company would prefer to be consistent year in, year out in the amount of money it puts into improving fixed and wireless network coverage.

"You probably don’t want to have big spikes in the capital allocation because then in the end it drives inefficiencies. We want to be consistent," said Hans Vestberg, Verizon’s new CTO, during an investor event today. "From an execution point of view you want to be consistent."

There's a bit of irony in Vestberg's statement, since Verizon has been one of the biggest ISPs to push the false narrative that net neutrality somehow killed network investment. This claim has been repeated time and time and time again by ISPs and FCC boss Ajit Pai, yet has been consistently contradicted by SEC statements, earnings reports, and countless admissions by industry CEOs, who have told a notably different story to company investors.

AT&T had promised to invest $1 billion back into its network due to the tax cuts, but the company intentionally failed to state what it would have paid without the cuts, leading many to believe the company's promise was an empty bluff.

Verizon has long been criticized for paying a negligible amount of taxes courtesy of a rotating crop of financial tricks it engages in on a routine basis. Former Presidential candidate Bernie Sanders went so far as to call the company a tax dodger.

"From 2008 to 2013, while Verizon made over $42.4 billion in U.S. profits, it received a total tax refund of $732 million from the IRS," Sanders complained in 2016. "Verizon’s effective U.S. corporate income tax rate over this six-year period was -2 percent. In 2012, Verizon stashed $1.8 billion in offshore tax havens to avoid paying U.S. income taxes."

Now, with the Trump cuts, Verizon's base tax rate is notably lower than ever, and the difference will be predominately pocketed by executives.