• The Federal Communications Commission will vote on December 14 on whether to roll back its net-neutrality rules.
  • FCC Chairman Ajit Pai has argued that the rules need to be repealed because they’ve caused a decline in broadband investment.
  • But Pai’s data doesn’t back up this assertion.

Ajit Pai says the Federal Communications Commission needs to ditch its net-neutrality rules because they’re hindering investment.

The rules the agency put in place in 2015 bar broadband providers from blocking, throttling, or offering preferential treatment to particular sites or services. Hampered by those rules, broadband companies are cutting back on investing in things like expanding their services to new customers or upgrading their networks, Pai, the FCC chairman, argues.

If that’s really what’s been happening, that would be terrible, especially in a country that has become ever more dependent on the internet, and one where the digital divide remains pronounced.

But there’s no evidence to prove Pai’s argument. In fact, the data that Pai points to doesn’t show anything close to a marked decrease in broadband investment. Instead, it shows that while broadband investment has risen and fallen a little bit over the years, it has been mostly flat since 2013.

And that's if you believe the data Pai cites. A study in May by the consumer advocacy group Free Press, which opposes repealing the rules, reported that broadband investment had increased since 2015.

Historical Broadband Provider Capex 2016

Foto: This data from USTelecom, which the FCC cites as proof that investment has decreased since the net-neutrality rules were put in place, shows that investment has been basically flat since 2013. source US Telecom

The debate over broadband investment is coming to a head as the vote on whether to repeal the rules nears. With Pai and his Republican allies outnumbering Democrats on the commission three to two, his proposal is expected to sail through when the FCC votes on it on December 14.

Investment is a key point in the net-neutrality debate

Broadband investment can take many different forms. It can mean building out high-speed wireless LTE networks so you have a zippy connection no matter where you are in the country. It can mean building wired broadband networks in rural areas that are underserved compared with urban and suburban regions. It can mean increasing the speed and bandwidth of existing connections so you can download files faster or stream ultra-high-resolution videos with little lag time.

Regardless of the form it takes, broadband investment is generally considered a good thing, because it promises faster internet speeds and more access to more people. As such, it has become a key point in the debate over net neutrality.

Those in favor of net neutrality have sought to show that the rules haven't affected investment or have encouraged it - that they benefit consumers without doing any harm. Those opposing net neutrality, such as Pai, have tried to show how bad the rules are for consumers by pointing to investment declines.

But the claim that investment has decreased thanks to net neutrality seems rooted in anything but reality.

Taking a closer look at a complicated picture

It also ignores the complexity of the investment picture. Not all companies increase or decrease broadband investments at the same time. And declines in investment often are due to the completion of large projects, such as when AT&T finished its LTE rollout, rather than changes in government regulations.

This chart from Free Press gives a clearer picture of recent broadband investment than the FCC's data and places it in the proper context. Even if overall investment may decline from one year to another, examining investments by individual companies can give you a better picture of what's going on in the industry.

Broadband investment 2015 and 2016

Foto: By looking at investments by individual companies rather than the industrywide investment number, you can get a better picture of what's going on in the industry. source Free Press

By the way, Free Press gathered all that data from the public records of the telecommunications companies, which just so happen to be the biggest cheerleaders of Pai's effort to repeal the net-neutrality rules. Those companies' data shows the rules haven't affected overall industry investment.

Pai's ignoring the facts

During a conference call that FCC officials held with reporters last week, I asked them about this discrepancy between Pai's assertion that investment is declining and what the actual data shows. They dismissed my question, saying I had my facts wrong. But they didn't offer any data that would prove Pai's argument.

Reached later, an FCC representative simply pointed to the USTelecom data (posted above) that Pai had previously referenced. The representative declined to make the chairman or anyone else on his staff available for an interview.

Pai's FCC has ignored much of the data that contradicts his rationale behind repealing net neutrality, Derek Turner, the author of the Free Press report on broadband investment, said in an email Monday.

The FCC "came into this with a preconceived notion, latched on to data that supported that notion, and ignored every single piece of conflicting evidence," Turner wrote.

There are many ways to measure broadband investment. It's easy to pick numbers that can bolster either side of the argument about net neutrality.

But even when you look at the data most favorable to Pai's position, it doesn't prove net-neutrality regulations have resulted in significantly lower broadband investment from telecom companies. At worst, investment has been flat since 2013. At best, it's increased.

It's a leap in logic on Pai's part to use two years of cherry-picked data to make the case that broadband is getting worse for Americans because of the net-neutrality rules.

But it's that leap in logic that's likely to result in the repeal of those rules.