Wednesday, May 10, 2017

Lower Broadband Capex Raises Concern From USTelecom

USTelecom says its early data “strongly suggests” that investment in broadband dropped in 2016, for the second year in a row. That raises a red flag for the association.

“Closing the digital divide and bringing more Americans access to the benefits of high-speed internet service won’t happen if new investment in broadband infrastructure continues to fall,” writes Patrick Brogan, vice president of Industry Analysis for USTelecom in a blog post. In 2016, capital expenditures for ISPs was $71 billion, down from $73 billion in 2015, and $74 billion in 2014, USTelecom’s current estimate shows. That’s $2.5 billion to $3 billion lower in 2016 than it was in 2014, the year before the FCC reclassified the internet as a utility – known as Title II.

Claims by some interest groups that broadband provider capex actually may have increased in 2015 and 2016, depend on figures that ignore accounting adjustments for certain non-material items like leased cell phones and acquisitions, such as AT&T’s merger with DirecTV and a Mexican wireless operation, according to Brogan. Continue Reading

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