USTelecom

Broadband investment rebounded in 2017, as a series of positive consumer and innovation policies and a pro-growth regulatory approach helped reverse the industry’s previous spending pullback, according to new research released by USTelecom. USTelecom’s annual broadband capital expenditure report shows broadband provider capital expenditures grew to $76.3 billion in 2017, compared to $74.8 billion in 2016, an increase of $1.5 billion.

In a paper commissioned by NTCA – The Rural Broadband Association and USTelecom, the authors examine communications networks, road networks, and electric power networks as three key network infrastructure industries; and the resulting vulnerability in low-density rural areas with the highest need for targeted subsidies. By the very nature of network economics, each industry exhibits economies of density and each reaches a point at which un-subsidized provision of service in low-density areas is not viable.

In a recent spending bill, Congress made $600 million available for additional broadband deployment to America’s rural areas. The US Department of Agriculture’s Rural Utilities Service (RUS) has been tapped to administer these funds through a new pilot program. Without question, this funding is a welcome and needed addition to the growing arsenal now aimed squarely at closing the digital divide to rural Americans once and for all. Private investment, paired with dedicated federal programs, will connect millions more in the coming years.

USTelecom has filed a forbearance petition with the Federal Communications Commission, asking the commission to eliminate a requirement for larger, incumbant telephone companies to offer unbundled network elements (UNEs) at regulated prices. USTelecom President and CEO Jonathan Spalter said telecom unbundling regulations currently enable competitive carriers to lease network elements – typically the copper connection between the customer and the telco central office – at “extremely low rates.” INCOMPAS, an association that represents competitive carriers, sees it differently.

US broadband providers invested approximately $76.0 billion in network infrastructure in 2016 down from approximately $77.9 billion in 2015 and $78.4 billion in 2014. From 1996 through 2016, the broadband industry has made capital investments totaling $1.6 trillion. The start of the decline, the first since the recession ended in 2009, coincided with Federal Communications Commission’s 2015 decision to reclassify broadband providers as common carriers under Title II of the Communications Act.