Pixel Envy

Written by Nick Heer.

FCC Chairman Won’t Change His Mind on Net Neutrality

Jon Brodkin of Ars Technica reports on Tuesday’s House testimony by FCC Chairman Ajit Pai:

The FCC has received more than 12 million comments on its proposed net neutrality rollback, but not all comments count the same. Pai has previously said that the “raw number” of comments supporting or opposing net neutrality rules “is not as important as the substantive comments that are in the record.”

[U.S. Representative Michael Doyle] asked Pai, “what kind of comment would cause you to change your mind?” Pai responded, “economic analysis that shows credibly that there’s infrastructure investment that has increased dramatically” since the net neutrality rules went into effect. Pai said he also would take evidence seriously if it shows that the overall economy would suffer from a net neutrality rollback or that startups and consumers can’t thrive without the existing rules.

Advocacy group Free Press has presented analysis that it says shows a 5-percent increase in ISP investment during the two-year period after the net neutrality vote and capital increases at 16 of 24 publicly traded ISPs. But Pai has expressed disdain for Free Press, calling it “a spectacularly misnamed Beltway lobbying group” that demands government control over the Internet. Meanwhile, different studies that showed investment declines have been cited favorably by Pai.

Pai heavily references noted anti-net neutrality advocate Hal Singer in the so-called “Restoring Internet Freedom” proposal (PDF) in regard to ISP capital expenditures in footnote 116:

See, e.g., Free Press, Internet Service Providers’ Capital Expenditures (Feb. 28, 2017), <a href=”https://www.freepress.net/[…] (noting a decrease in investment from 2015 to 2016, but claiming an increase in investment in the 2-year period of 2015–16 compared to 2013–14). We observe, however, that these figures showing increased investment do not incorporate the generally accepted accounting practice of maintaining consistency over time, as they include AT&T’s foreign capital expenditures in Mexico as well as expenditures related to DirectTV, see Hal Singer, Tracing AT&T’s Capital Expenditures Over Time, https://haljsinger.wordpress.com/…, and do not adjust for Sprint’s changed accounting treatment of leased handset devices from an operating expense to a capital expense. See Hal Singer, 2016 Broadband Capex Survey: Tracking Investment in the Title II Era, https://haljsinger.wordpress.com/….

I think Pai’s rejection of Free Press’ ’13–’14/’15–’16 comparison is disingenuous.1 Both incorporate full years, and allow for the broadest possible context for comparison — given how long Title II classification has been implemented. Singer’s 2016 article on ISP capital expenditures compares the 2014, 2015, and 2016 calendar years, and it appears to be a very selective scale. The broadband industry’s own trade organization shows that 2014 was a year of outsized expenditures — higher than any year since 2001. Singer, Pai, and others may argue that 2014 was larger by only a relatively small amount — $2 billion greater than the preceding year, and $1 billion greater than the succeeding year, against $70-odd billion total — but that means that a supposed drop in expenditures is only by a slight amount, too.

Pai is pretty dead-set that he’s going to destroy net neutrality — logic, reasoning, and facts be damned. That’s what blind ideology looks like.

  1. Also, his slight against Free Press as a “spectacularly misnamed Beltway lobbying group” is ridiculous. They say that they’re independently funded and don’t take money from businesses. Meanwhile, Singer has previously provided services for AT&T and Verizon. ↩︎