Net neutrality advocates unveiled new ammunition on Friday, July 14, in support of the regulatory status quo.
Federal Communications Commission Chairman Ajit Pai has maintained that the agency’s Open Internet Order, which enforced net neutrality provisions in March 2015, has been a drag on capital expenditures.
In May, Pai introduced a proposal, “Restoring Internet Freedom,” that would repeal the 2015 order, which reclassified the internet as a utility under Title II of the Communications Act of 1934. In it, Pai asserted that net neutrality has generated such uncertainty among internet service providers such as Charter Communications Inc., Comcast Corp. and Verizon Communications Inc. that they’ve have cut back on their spending.
But in a filing with the FCC on Friday, a group of 20 investment firms and public interest foundations that collectively holds around $190 billion in assets challenged Pai’s assertion that the order has curbed corporate investments in internet networks and new services. Open Mic, a consumer group that works on issues related to affordable internet access, coordinated the filing joined by Boston Common Asset Management, Trillium and the Sustainability Group as well as the Nathan Cummings Foundation, Park Foundation and the Wallace Global Fund, among others.
Open Mic said investment in broadband internet networks actually has increased since the FCC adopted the Open Internet Order. Citing government filings by the country’s largest internet service providers, Open Mic found that telecom investment among publicly traded companies increased 5.3%, or $7.3 billion, between 2014-15 and 2015-16.
To illustrate their findings, the investment firms pointed to reports and statements by telecom executives such as Charter CEO Tom Rutledge, who said in February that the country’s second-largest internet provider expected to increase its spending on network infrastructure in 2017.
“2017 is probably a bit higher in terms of absolute dollars than what we were performing in 2016,” Rutledge said on the company’s fiscal first-quarter conference call. “But it shouldn’t be a dramatic change in terms of capital intensity or [capital expenditure] as a percentage of revenue.”
Although Rutledge said he was concerned that the regulatory framework known as net neutrality could trigger “follow-on issues,” he added, “We’re actually quite comfortable with the way we sell and service our products today.” Charter’s infrastructure spending for fiscal 2016 totaled $14.5 billion, some 12% higher than the company had forecast in August 2015, five months after the Open Internet Order was approved.
Similarly, AT&T Inc.’s 2016 annual report reads that even though it had invested $140 billion in capital improvement of its wireless and wireline networks over the past five years that “we expect to remain one of the largest investors in the United States.” And earlier this year, Comcast reported that its capital expenditures increased 7.9%, or $7.6 billion, in 2016.