US ISPs lowered cable investment despite net neutrality repeal

23 Jan 2019

One of the main justification of the Federal Communications Commission (FCC) for repealing net neutrality rules was based on the prediction that deregulation would boost broadband network investment. However, this prediction has not been turned into reality. In 2018, Charter, Verizon, and Comcast reduced capital expenditures. In an earnings announcement, Comcast said that its cable division decreased 3 percent less on capital expenditures last year. According to MoffettNathanson estimates cited in a Light Reading article, Charter and Comcast are both expected to reduce cable capital expenditures in 2019. 

 

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The Internet’s success lies in its design, which is based on the principle of net neutrality. From the outset, the flow of all the content on the Internet was treated without discrimination. New entrepreneurs did not need permission or market power to innovate on the Internet. With the development of new digital services, especially the ones consuming high bandwidth such as high-quality video streaming, some Internet operators (telecom companies and ISPs) started prioritising certain traffic – such as their own services or the services of their business partners – based on business needs and plans, justifying such an approach with a need to raise funds to further invest in the network. Net neutrality proponents strongly fight back such plans arguing this could limit open access to information and online freedoms, and stifle online innovation.

 

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