Claims That Net Neutrality Hurt Broadband Investment Are Crap

Claims That Net Neutrality Hurt Broadband Investment Are Crap

As ISPs have poured millions of dollars and thousands of lobbyist man hours into killing net neutrality protections, they have made one common refrain: that the FCC's fairly modest net neutrality rules somehow destroyed network investment in the United States. Never mind that any time a journalist fact checks these claims they find they're indisputably false, ISP lobbyists, lawyers, executives and hired mouthpieces continue to repeat the claim -- as if redundancy somehow creates truth itself.

A new report by Deutsche Bank once again makes it very clear: the claim that net neutrality had a dramatically-negative impact on network investment is nonsense, and, rules or not -- carriers already plan to spend $175 billion over the next 10 years building out their fiber networks.

According to the bank's latest report, spending on fiber optic network upgrades have exploded as companies rush to prepare for fifth generation (5G) wireless. They're also looking to notably beef up US fiber infrastructure as they try to sell cities on the technology and bandwidth needed to power the self-driving cars, smart utility grids, and other components of the smart cities of tomorrow.

Verizon alone has recently spent $1 billion to buy 1.5 million miles of fiber over three years from Corning and another $300 million to buy 1 million miles of fiber over 3 years from Prysmian, and just had a $100 billion offer to acquired Charter (mostly to nab its fiber assets) rebuffed. AT&T and CenturyLink continue to slowly but surely expand their own, more modest fiber upgrades, and companies like Altice are already at work pushing full fiber to the home to most of the company's subscribers.

“To support the upcoming innovations such as autonomous driving, IoT, smart cities, the US needs to densify its fiber network,” Deutsche Bank said. “The US fiber penetration rate is 20% vs. 75% for leading OECD countries, which suggests a large gap needs to be closed.”

Deutsche Bank states that to reach this goal, the “proprietary top-down fiber model suggests spending on fiber to the home will total ~$175B over the next decade" -- noting that "an additional $25-30B will likely go towards 5G.”

That is, if you're playing along at home, not a slowdown by any measure, and the lion's share of these investment plans occurred while net neutrality rules were in place. And these investments should accelerate next year regardless of whether or not Ajit Pai is successful in ignoring the public and killing popular net neutrality protections.

"Telecom/cable companies are increasingly talking about the convergence of fiber to the home and the 5G rollout as one large investment cycle that will likely ramp further in 2018,” said Deutsche Bank.

Of course ISP executives have been telling investors privately that the claim that net neutrality killed sector investment was bullshit for several years now, but apparently that's a message that bears repeating for those still somehow buying into the lie that popular, modest consumer protections were a network investment apocalypse.