Just last month Horney used data from the annual reports of thirteen large broadband providers to demonstrate that broadband capital investment increased 14 percent from the end of 2016 to the end of 2017, as broadband providers anticipated repeal of the order.
In an emailed statement, an FCC spokesman pointed to a number of steps the Trump administration has taken to help all Americans, not just those living in densely-populated areas, gain high-speed internet access. He referenced reforms to the Universal Service Fund, an FCC program that subsidizes telecommunications in underserved areas, and removal of “regulatory barriers.”
“One of those regulatory barriers was the prior FCC's 2015 Title II Order, which had a disproportionate impact on smaller providers and those serving rural America,” the FCC spokesman stated. “Indeed, heavy-handed regulations are more likely to deter deployment in less densely-populated areas than densely-populated areas because the economic case for investing there is generally not as strong."
To date, regulations have performed only a bit part in the staging of new telecommunications technologies and the net neutrality rule wasn’t one of them, said Blair Levin, a veteran FCC official who now consults Wall Street on telecom issues. "Competition builds the upgrades," he said.
"Nobody on Wall Street actually looks at the net neutrality battle as having much to do with anything related to investment," said Levin, who oversaw the Obama administration’s 2010 National Broadband Plan. The plan was required by an economic stimulus package that devoted $7.2 billion to build out infrastructure in underserved areas, for the most part.
Today, more than 30 percent of Americans in rural areas still lack access to high-speed wireline broadband versus 2 percent of urban dwellers, according to the February 2018 FCC deployment report.
"It’s hard to make money when you have a house per square mile,” said Craig Settles, a municipal broadband consultant.
Returns on investment in fiber networks typically require more than a couple of financial quarters and stockholders want quick returns, he said. "The incumbents don’t go where there are not enough people for them to get their money back," he said, referring to traditional ISPs such as Verizon and AT&T. Verizon declined to comment and AT&T referred questions to USTelecom.
A USTelecom spokeswoman said in an emailed statement, "Title II further increases costs and raises new risks, making the business case for rural deployment even harder."
John Horrigan, a researcher who studied Internet adoption while working on the 2010 National Broadband Plan, says the net neutrality issue is an important question, but it has had an unwanted side effect.
“A whole lot of other issues aren’t getting much attention,” he noted. Like, “how to close the digital divide, how to improve digital equity."
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