US Telecom: Broadband investments continue to go down in 2016

USTelecom’s seventh annual report on broadband investment numbers will be finalized soon, but the initial analysis suggests that investment in 2016 continued to trend downward following the Federal Communications Commission’s (FCC) adoption of the 2015 Open Internet Order.

According to the Association data compiled from internet service providers (ISPs) which usually represent between 90 to 95 percent of annual industry capital expenditures, suggests the dip in broadband investment we reported on in 2015 is more than a one-year phenomenon.

In 2016, capital expenditures for these ISPs was $71 billion, down from $73 billion in 2015 and $74 billion in 2014, our current estimate shows. That’s $2.5 billion to $3 billion lower in 2016 than it was in 2014, the year before the FCC adopted Title II utility regulations.

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 cellphones and acquisitions, such as AT&T’s merger with DirecTV and a Mexican wireless operation.