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Broadband Infrastructure Investment Rebounds, USTelecom Says

Randy Sukow Oct 18, 2018

After dropping in 2015 and 2016, the total amount of investment in U.S. broadband network construction increased in 2017, USTelecom announced today. The association released its annual analysis of broadband capital expenditures, which includes wireline (fiber and DSL), wireless and cable modem investments. Those providers have invested $1.6 trillion in broadband networks since USTelecom began keeping track in 1996.

“Broadband providers across the nation have stepped up with meaningful investments, bringing the ongoing promise of broadband to Americans everywhere,” said USTelecom President and CEO Jonathan Spalter during a luncheon “Investment Forum” earlier today.

Total investment was $76.3 billion last year, an increase from $74.8 billion in 2016. The total yearly spending hit a peak of $78 billion in 2014, the year before the FCC reclassified Internet service to be a Title II telecommunications service and imposed net neutrality regulations.

USTelecom said the rebound in investment was a direct result of the current FCC’s moves throughout 2017 to reverse the 2015 rule change, culminating with the Commission’s adoption of the “Restore Internet Freedom” order last December.

“The 2015 [net neutrality] decision classified broadband for the first time as a 1930s-style utility … The year after the FCC’s 2015 decision saw a $15 billion decline in investments,” said FCC Commissioner Brendan Carr (pictured), a panelist at the luncheon. “[Now] we’re seeing a real significant increase in this space, which is critical because there are still millions of Americans that don’t have a high-speed connection. The key to getting there is increasing investment.”

From a rural broadband provider’s perspective, Jason Williams, CEO of Montana telco Blackfoot, confirmed the importance of reversing net neutrality. “I can’t understate the importance of the decision … By eliminating the specter of regulation, it really gives us certainty. Any time there is a certain level of certainty for a prolonged period of time for companies like mine, we feel comfortable making capital investments,” Williams said.

Williams described how Blackfoot has focused its investments on providing Montana’s particular broadband needs. Blackfoot has fiber connections with the state’s largest cities and Montana “on a per capita basis has more telecommuters than any other state in the country,” he said. The telco has gone a step further by implementing a “corporate business accelerator” program to help launch local businesses that rely on connectivity.  (See video above.)

“What we do is take high-tech companies and effectively provide them a space where they might have a brilliant idea, but they don’t have it productized yet, so we bring our product and marketing people and help them make a product,” Williams said. He said that Blackfoot so far has begun working with three companies -- a video content provider, a healthcare technology company and an oil/gas mapping company.

Along with the capex investment update, forum attendees got latest word on the U.S. Department of Agriculture’s new e-Connectivity Pilot program to distribute $600 million in broadband grants and loans to unserved rural areas. Agriculture Secretary Sonny Perdue said that the agency should be able to release application procedures “hopefully by the end of the year.”

USDA completed a comment period on the pilot program last month. “We received more than 250 comments. Thank you for participating in that,” Perdue said. “We’re shifting through all the feedback we received to design the best program. We’re close to determining rules but we’re not there just yet. The broadband team at USDA is still working out the final details.”

Update, Oct. 19: FCC Chairman Ajit Pai released a statement regarding USTelecom’s latest capex analysis: “Today’s report confirms that the FCC’s policies to promote broadband deployment are working.  After Internet service providers reduced new investments in 2015 and 2016 under the prior Administration’s regulatory approach, broadband investment increased in 2017 by $1.5 billion over the previous year.  That’s real progress for American consumers, and another step toward better, faster, and cheaper broadband for all Americans.”

The video above and text referring to the video were added to the original story posted yesterday.

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