Internet providers invest in networks despite net neutrality jitters
If you ask most big US internet providers, they'll swear up and down that the newer, tougher net neutrality rules will kill investment in their networks. Surely the only way to promote growth is to loosen regulation, right? Well, not quite. After digging through carriers' earnings, Ars Technica has determined that most big ISPs have been spending more on upgrading their networks in recent months. Comcast's capital expenses increased 11 percent year-over-year, largely due to newer-generation home equipment; it's also launching pushing hard on multi-gigabit service. Time Warner Cable also spent 10 percent more upgrading its network in the first nine months of the year. Telcos like AT&T, T-Mobile and Verizon have seen mixed spending, but they're still pushing harder than ever on services like gigabit internet and upgraded cellular data.
So why the doom-and-gloom talk? Simply put, it's all about the bottom line. ISPs want to avoid any rules that might raise their costs or invite competition, and requiring them to treat all internet services fairly (instead of blocking or slowing down those services) could lead to that trouble. However, increased costs might be hard to avoid. After all, it's not as if your local cable giant is going to scale back when a rival telecom (or an upstart like Google Fiber) is promising faster data. In short, the warnings of reduced investments ring hollow -- spending is likely to increase so long as there are speed upgrades and alluring new services waiting in the wings.
[Image credit: Joe Raedle/Getty Images]
