We’ve well established by now that the telecom industry’s attack on net neutrality is just one small part of a much larger plan. A plan that’s going to gut nearly all state and federal oversight of some of the least-liked, least competitive companies in American history.
And while ISPs like Comcast have already begun signaling that they’ll be engaging in all manner of anti-competitive shenanigans in the wake of this regulatory “reform,” with the other hand they’re busy claiming that things will somehow be much, much better without meaningful oversight of the uncompetitive broadband sector.
Case in point: Comcast issued a statement last week claiming that the government’s new tax plan and the end of net neutrality will directly result in a dramatic spike in Comcast’s network investment and job creation plans.
If you look at Comcast’s capital investments over the past 12 months and calculate continued investment growth at current rates—you’ll find that Comcast was already on pace to spend more than $50 billion on investment over the next five years.
“Based on the passage of tax reform and the FCC’s action on broadband, Brian L. Roberts, Chairman and CEO of Comcast NBCUniversal, announced that the Company would award special $1,000 bonuses to more than 100,000 eligible frontline and non-executive employees,” Comcast said.
“Roberts also announced that the Company expects to spend well in excess of $50 billion over the next five years investing in infrastructure to radically improve and extend our broadband plant and capacity, and our television, film, and theme park offerings,” the company added. “With these investments, we expect to add thousands of new direct and indirect jobs. We will have more to say on capital at our upcoming January 24th earnings report.”
Comcast has long claimed that the FCC’s 2015 net neutrality rules dramatically harmed telecom industry investment, a claim that publicly-available ISP earnings reports, SEC filings, and executive comments to investors have repeatedly disproven. As such, it only makes sense that the cable giant would try to insist that a massive boon in investment would occur in the wake of the FCC’s rollback of the regulations.
But Comcast’s latest attempt at pitching trickle-down-economics looks to be another chapter of its long history of selling things it was already going to do as responses to regulatory and legislative decisions that favor the company.
Journalists that could be bothered to take a closer look at Comcast’s earnings discovered that the company’s promise of $50 billion in investment over five years is something that would have occurred regardless of the net neutrality repeal or Comcast’s shiny new tax cut.
“In Q3 2017, the most recent quarter, Comcast’s capital expenditures were $2.4 billion,” noted Ars Technica’s Jon Brodkin. “Continuing to spend at that rate, even if Comcast doesn’t increase spending to account for inflation, would push Comcast to $9.6 billion a year or $48 billion over the next five years.”
Indeed; if you look at Comcast’s capital investments over the past 12 months and calculate continued investment growth at current rates—you’ll find that Comcast was already on pace to spend more than $50 billion on investment over the next five years.
AT&T similarly promised that it would boost spending by $1 billion should the government’s tax plan be successfully passed, but intentionally failed to provide any hard data on what AT&T’s spending would have been if the tax plan hadn’t been implemented. The company similarly promised employee bonuses, but failed to note that these bonuses had already been coordinated as part of union negotiations completely unrelated to the tax plan.
Taking something a company already planned to do and using it as a public relations prop is a long-standing tradition in the telecom sector.
ISPs like AT&T often carve out broadband investments they were planning to make anyway, then insist these investments were only made possible thanks to a rotating array of regulatory favors ranging from approval of a new merger to the elimination of net neutrality protections. Rarely if ever do regulators or the media revisit the numbers to confirm accuracy down the road.
Comcast’s certainly no stranger to this tactic. Back in 2009, Comcast’s top lobbyist David Cohen intentionally paused a new program at the company designed to help bring discounted broadband to the poor. Why? Cohen wanted to use it as regulator bait to secure approval of the company’s planned acquisition of NBC Universal.
Similarly, Comcast’s employee bonuses are being notably over-hyped for dramatic effect. The $1,000 per employee being doled out is a pittance compared to the billions Comcast stands to net courtesy of a lower overall tax rate, the elimination of consumer broadband privacy protections, and the elimination of hugely-popular net neutrality rules.
As we’ve noted previously, the Trump administration’s plan is to gut nearly all state and federal oversight of some of the least competitive, least-liked companies in American history. The financial benefits of such a move to companies like Comcast will be almost immeasurable. So while a $1,000 bonus at Christmas time is certainly sweet, it’s a tiny fraction of the overall financial gain that will be pocketed by company executives in the years to come.
Which is all wonderful news if you’re a higher-level employee at Comcast, but certainly no treat for the millions of consumers facing increasing cable and broadband rates and the abrupt departure of adult regulatory oversight of the broken telecom sector.