AT&T, Comcast Dramatically Cut Network Spending Despite Net Neutrality Repeal
from the credibility-problem dept
Comcast cut back on network investment in 2019 despite repeated claims that killing net neutrality (and neutering the FCC in general) would have the exact opposite impact. With the company’s fourth quarter earnings now in the books, it’s clear that the company’s cable and broadband division overall CAPEX dropped in 2019 by roughly 10.5%. Comcast reports cable division CAPEX in four categories, and investment dropped in three out of four of them:
“Comcast reports cable-division capital expenditures in four categories, and its full-year spending dropped in three of them. Comcast spending on line extensions?defined as “costs associated with entering new service areas… includ[ing] fiber and coaxial extensions”?dropped from $1.5 billion in 2018 to $1.4 billion in 2019. Comcast spending on “scalable infrastructure,” which provides additional bandwidth and other service improvements, dropped from $2.6 billion to $2 billion. Spending on customer-premises equipment dropped from $2.9 billion to $2.7 billion.”
Granted that’s the exact opposite of what Comcast lobbyists and Ajit Pai’s FCC said would happen when it neutered the FCC at telecom lobbyist behest. The public was told more times that we could count that the FCC’s fairly modest (by international standards) net neutrality rules had all but demolished network investment, despite absolutely no evidence that was actually true. The industry and its allies at the Trump FCC then insisted network investment would soar post net neutrality repeal, something that pretty clearly isn’t happening:
“Comcast isn’t the only major ISP cutting investment, as AT&T projects that it will reduce capital spending from $23 billion in 2019 to $20 billion in 2020. Charter Communications said in October that its capital expenditures excluding mobile services would total $7 billion in 2019, down from $8.9 billion in 2018. Verizon also reported a capital-expenditure decline in the first nine months of 2019.”
AT&T also released its earnings this week (pdf), which showed that AT&T’s CAPEX has been steadily dropping since 2006, and its fourth quarter CAPEX specifically dropped to $3.9 billion–the lowest total in nearly a decade:
AT&T $T capital spending (network and facility upgrade expenses) dropped to $3.8 billion the lowest level in nearly a decade. https://t.co/NevlRIePVI pic.twitter.com/sJrFbmaOSw
— Scott Moritz (@MoritzDispatch) January 29, 2020
Propped up by a chorus of telecom-linked think tankers and other “very serious policy voices,” the Trump administration doled out billions in massive tax cuts and regulatory favors to the nation’s biggest telecom companies, and all taxpayers got in return were some empty promises and a significant pile of bullshit. And so far, there’s been absolutely no effort, on any front, to hold anybody accountable for any of it.
Filed Under: capital expenditure, competition, fcc, net neutrality, network spending
Companies: at&t, comcast
Comments on “AT&T, Comcast Dramatically Cut Network Spending Despite Net Neutrality Repeal”
Who would have guessed?!?!?
Wow, I’m shocked! (/s)
You mean to tell me that companies will invest less if motivation to invest disappears?
Re: Who would have guessed?!?!?
I am shocked — shocked! — that capitalism is going on in this establishment.
Re: Who would have guessed?!?!?
I find it strange that a corp would Stop Spending to upgrade, after the Gov. rep decides to not give them money..
You would think that with Stocks sales and Payments for service they would have LOTS of money..
Re: Who would have guessed?!?!?
Never mind all that: I see a shiny object over there in the distance:
–>More Tax Cuts will surely fix this problem – It’s obvious that taxes were not cut enough last time, or we wouldn’t be having this problem right now.
Re: Who would have guessed?!?!?
"You mean to tell me that companies will invest less if motivation to invest disappears?"
I’m curious … what do you think motivated AT&T to make their recent ill fated investments? Has that motivation now disappeared? Do the decision makers have any fiduciary responsibilities to the stockholders?
Waiting for disruption
Are they dragging their feet in hopes that wireless advances will supplant all the fiber they’re failing to lite? If so it seems like they’re gambling that they’ll be the ones to install said wireless capacity. Much like content providers now trying to access customers behind Comcast’s tollbooth; in the future Comcast may find itself trying to scale the customer access barrier if, for instance, low orbit satellite ISPs become prevalent.
I’m almost a little excited to hear the Comcast argument on why their competitors need to be bound by common carrier rules in delivering satellites… and the response that Comcast is free to build its own space launch systems if it wants access to that market.
Re: Waiting for disruption
I am so hoping that StarLink lives up to the hype, as well as the potential competitors. If LEO satellites do deliver on low latency, I am going to buy lots of popcorn.
Re: Re: Waiting for disruption
I am beginning to think this is a continuing advertisement.
Re: Re: Waiting for disruption
I am cautiously optimistic about StarLink and similar projects. Meanwhile I do what I can to encourage the growth of co-operative networks, including projects like Althea incentivized mesh networks, which have the added bonus of extra reliability though multiple paths to a node.
Didnt?
the Gov. take back Rural support? as to what Mr. Pai has said and done??
'Their check cleared right? Then they did nothing wrong.'
And so far, there’s been absolutely no effort, on any front, to hold anybody accountable for any of it.
Naturally, I mean the companies involved are greedy, they aren’t stupid. Kick enough money to enough politicians and any chance for ‘accountability’ beyond ‘how high are our bonuses this year?’ goes right out the window.
Richard Bennett in 3, 2 –
What’s that? He’s crushing on Jon Brodkin instead? He’s getting his ass kicked over at Ars Technica?
…Wow, and here I thought John Smith was a glutton for punishment.
At this point if you are surprised by such outcome you are simply stupid. There’s a lengthy list of cases where the telcos got what they demanded and failed miserably to deliver what was promised or predicted. Or you are Ajit Pai feigning surprise.
So?
After all the FUD about how people would die if Net Neutrality ended, NONE of that happened either. There aren’t paid prioritization or any of the other things happening.
As we found out, ending NN was a good thing. The government wouldn’t have control of the Internet, and companies could actual do proper networking (which IS about prioritization.)
Re: So?
Log back in, Bennett.
It is still bad...
Don’t let yourself think killing Net Neutrality was a good thing. Of course they are not going to do something that big right off, but it has opened the door for all kinds of crap we will no doubt see….just like this investment but…except it wasn’t the biggest of concerns.