Perhaps you
might join me in wondering how sponsored researchers managed to convince FCC
Chairman Pai and others that network neutrality regulation singularly caused a near
immediate drop in infrastructure investment by U.S. carriers. How do you isolate the variable of “regulation”
from, for example, the investment cycle in migrating from 4G to next generation
5G wireless plan.
Set out
below, are two FCC charts that track capex incurred by the major U.S. wireless
carriers from 2010 to 2019:
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Source: https://www.fcc.gov/20th-mobile-wireless-competition-report-quick-facts
From 2010
to 2019, the FCC toggled between imposing network neutrality requirements and
eliminating them. For purposes of our direct comparison of a regulatory or
deregulatory action and subsequent impact on investment, keep these years in
mind:
2010, the FCC approved the first
FCC Open Internet Order creating network neutrality rules and regulations; 2014,
the D.C. Circuit partially reverses the FCC on grounds that some of the network
neutrality requirements imposed common carrier duties on private, non-common
carriers; 2015, the FCC respond to the appellate court reversal with the
2015 Open Internet Order reclassifying broadband Internet as Title II regulated
common carrier telecommunications service; 2016, the D.C. Circuit defers
to the FCC and largely upholds the Commission; 2017-2018, the Ajit Pai
led FCC signals its priority in reversing the 2015 Open Internet Order and does
so in 2018 with the Restoring Internet Freedom Order.
Does
wireless carrier investment correlate up or down with the changing regulatory
regime? It sure does not look like it to me.
Even stakeholders, when communicating with buy side Wall Street analysts,
emphasize competitive necessity and the business cycle for next generation
network investment.
Regulation
does not matter significantly, until it becomes the sole predictor of
investment in a different forum.
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