USTelecom: Broadband Investment Still Climbs

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U.S. broadband provider capital investment increased by approximately $3 billion in 2018. That continues the positive momentum shift that began in 2017, when the FCC signaled its intention to restore a forward-looking regulatory framework for broadband, notes USTelecom. According to a preliminary analysis of 2018 company data, USTelecom estimates that U.S. broadband providers invested approximately $75 billion in 2018, up from $72 billion the prior year.

The association reported aggregate industry annual capital spending dating back to 1996, after collecting, analyzing, and evaluating relevant data and ensuring consistent comparisons over time. As detailed in previous research, by 2016, broadband providers’ annual capital investment declined by several billion dollars from the recent peak in 2014.  

Annual broadband investment rebounded in 2017, and the data now confirms that the upward momentum continued in 2018 – at least for the providers analyzed here, who historically account for nearly 95 percent of aggregate capex. USTelecom will publish final 2018 numbers once it can account for non-reporting companies.

“The decline in capital investment starting in 2015, and the recovery that started in 2017, suggest the likelihood of a negative regulatory impact from the 2015 utility classification of broadband providers and, conversely, a positive impact from a return to a more forward-looking policy environment in 2017,” states the association.

USTelecom’s top line broadband capex data strongly suggest that the current pro-investment, pro-innovation, and pro-consumer policy environment is working. Broadband providers are putting an increasing amount of capital to work, upgrading networks, rolling out fiber and 5G wireless, and narrowing the digital divide.

In response, FCC Chairman Ajit Pai said under his leadership, the agency focused on reducing unnecessary regulatory burdens and cutting red tape that discourages broadband deployment. It’s also been concentrating on updating FCC rules to match the modern communications marketplace.

“The latest evidence reaffirms that our policies are working,” said Pai. “For instance, in 2018, fiber was deployed to more new homes in the United States than any year in history, and small cell deployment more than quadrupled. Average broadband speeds have increased substantially.”

June 12, 2019

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