Research Report
The Truth About Net Neutrality and Investment
Free Press report Finding the Bottom Line: The Truth about Network Neutrality and Investment provides overwhelming evidence, despite the claims of companies like AT&T, that Network Neutrality will not harm network investment. The report shows that open Internet rules will likely have a positive impact on investment in both the network and applications markets.
A variety of factors drive investment, ranging from competition to supply costs. In the telecom sector, light regulation like Net Neutrality will play only a minor role in actual investment decisions.
* Net Neutrality will likely encourage increased investment in network infrastructure and spur even higher levels of investment in the applications and content sector -- the key driver of growth in the Internet access market.
* AT&T’s overall gross investment increased by more than any other Internet service provider’s in America during the two years that it was required by the FCC to operate a neutral network under merger conditions. During this period of mandated Net Neutrality, AT&T’s investment in its wireline network increased from 13 percent of revenue to 20 percent of revenue, well above the average of all other Internet service providers.
* While claiming Net Neutrality will deter investment, most U.S. Internet service providers are currently disinvesting in their networks by depleting more in assets than they spend investing and maintaining their networks. AT&T, while operating under Net Neutrality merger conditions, was one exception to this trend.
* Incumbent phone company investment rose dramatically during the years following regulations created by the 1996 Telecommunications Act, but declined after the FCC eliminated most of these rules.
A variety of factors drive investment, ranging from competition to supply costs. In the telecom sector, light regulation like Net Neutrality will play only a minor role in actual investment decisions.
* Net Neutrality will likely encourage increased investment in network infrastructure and spur even higher levels of investment in the applications and content sector -- the key driver of growth in the Internet access market.
* AT&T’s overall gross investment increased by more than any other Internet service provider’s in America during the two years that it was required by the FCC to operate a neutral network under merger conditions. During this period of mandated Net Neutrality, AT&T’s investment in its wireline network increased from 13 percent of revenue to 20 percent of revenue, well above the average of all other Internet service providers.
* While claiming Net Neutrality will deter investment, most U.S. Internet service providers are currently disinvesting in their networks by depleting more in assets than they spend investing and maintaining their networks. AT&T, while operating under Net Neutrality merger conditions, was one exception to this trend.
* Incumbent phone company investment rose dramatically during the years following regulations created by the 1996 Telecommunications Act, but declined after the FCC eliminated most of these rules.