Phoenix Center Says Free Press ISP Investment Study Should Show Decline; Free Press Disagrees
The Phoenix Center disputed a Free Press report that aggregate capital expenditures at publicly traded ISPs were 5 percent higher in the two years after the FCC's 2015 Title II broadband reclassification order than in the previous two years (see…
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1705150061). "Correcting only for inflation, Free Press’ data shows capital expenditures" were "down significantly in 2016," almost "$4 billion below expectations," said a Phoenix release Monday. That reduction "is similar to the $3.7 to $5.1 billion investment decline" cited by FCC Chairman Alit Pai in announcing his proposals to return broadband to a Title I classification, said Phoenix Chief Economist George Ford. “While Free Press wishes to peddle the fairy tale of positive investment effects, in fact their Report demonstrates that reclassification has been a nightmare,” he said. Free Press Research Director Derek Turner responded in a statement: "Phoenix Center starts with the strange assumption that the industry’s aggregate capex should have risen 10 percent, then says since it didn’t, it must be Title II’s fault. There's no proof whatsoever for that strange assertion. And as our report specifically notes, looking at aggregate capital expenditures is a foolish way to measure the impact of Title II in the first place. Even if there was a real decline in the aggregate value between 2014 and 2016, that doesn’t mean Title II had an impact. It could simply reflect the fact that a few larger ISPs had reached the completion of an upgrade cycle, and/or entered a phase of more cost-effective deployment, which is exactly what happened at AT&T. No matter what Phoenix wishes the data says, they can’t rebut the facts that most ISPs are investing more..."