Today, Comcast filed comments in the FCC’s proceeding to restore, protect, and maintain a free and open Internet. As noted in our filing, we are, and will remain, committed to the core tenets of a free and open Internet, regardless of the outcome of the FCC proceeding, or any future legal or political developments.
We’ve repeatedly pledged from the highest levels of our company — from Comcast Corporation Chairman and CEO Brian Roberts, Comcast Cable President and CEO David Watson, and from me – that we do not and will not block, slow down, or discriminate against lawful content. And that we believe in full transparency; customers will always know what our policies are.
Our comments today reinforce our consistent and longstanding support of open Internet protections. In view of this consistent track record, it’s time for the naysayers to stop ignoring our – and other ISPs’ – commitment to net neutrality. This proceeding is simply not putting net neutrality at risk, no matter how many words are written attempting to misinterpret the intention and purpose of the NPRM.
It is also important to note that the Internet was working very well before the Wheeler FCC shifted course and adopted Title II utility regulation from the 1930s. As FCC Chairman Pai said in May, "The Internet wasn’t broken in 2015. We were not living in a digital dystopia." The Internet was thriving. The charts below show just some of the miraculous growth of the Internet from 2005 to 2015. Internet connections grew by over 600%; annual investment grew by $14 billion; online video subscribers went from just about zero to almost 90 million. Startup Internet companies grew into some of the largest companies not just in the U.S., but also in the entire world. As shown in the bar chart below, companies went from $381 billion in value to over $1.7 trillion in value. All without Title II.
The current Title II regulations do not promote the continuing unfettered growth of the Internet ecosystem. As I have said before, an open Internet does not need – and is in fact thwarted by – the classification of broadband Internet access service as a utility under Title II of the Communications Act of 1934. Such regulation is entirely unnecessary, outdated, and imposes substantial costs that undermine investment and innovation and undercut efforts to bridge the digital divide and deploy broadband to all Americans.
Studies conducted by economists have confirmed the harms to investment. One recent study found that "capital expenditure from the nation’s twelve largest Internet service providers has fallen by $3.6 billion, a 5.6% decline relative to 2014 levels." A CTIA study found that capital expenditures declined for wireless providers by 17.4% from 2015-2016. A study by Dr. George S. Ford found that the threat of Title II regulation between 2011 and 2015 reduced broadband investment by about 20% to 30%, or about $30 to $40 billion annually. That reduction amounts to "about $150-$200 billion over the five-year period," or the equivalent of losing an entire year’s worth of investment.
At Comcast, based on public numbers, making an assessment based on capital intensity as opposed to actual capital spend, the leveling off and reduction in capital intensity at Comcast since broadband was reclassified under Title II suggests our capital spend will decline over $2.5 billion over a three-year period compared to what it would have been otherwise.
Groups that claim that broadband investment hasn’t been affected by Title II aren’t living in the real world.
And it isn’t just investment that has been negatively impacted. Consumers are directly affected because this regulatory environment holds back marketplace innovations – even innovative services that don’t go over the Internet. For example, Comcast’s Stream TV, an in-home, IP-based cable service, which is delivered exclusively over our cable systems and which doesn’t even touch the Internet, was held up from a broad consumer rollout because of the uncertainty of an FCC investigation lasting 18 months.
Dr. Christian Dippon, in his latest paper on the effects of Title II regulation (which is included in our filing), hits the nail on the head: "The economic evidence clearly demonstrates that Title II causes more harm to the public interest than any good that might come from using this regulatory framework." He finds that Title II "was designed to remedy an entirely different problem than the one it is purportedly being used to address today." He explains why ignoring this fundamental misfit "has simple, predictable, and especially negative implications for U.S. consumers." Relying in parts on the existing literature, Dr. Dippon finds a $35 billion investment loss per year reasonable and calculates that the U.S. economy has lost approximately 700,000 jobs since the FCC applied utility-style regulation to broadband Internet access service providers. Dr. Dippon highlights that Title II, coupled with the General Conduct Standard, "establishes a regulatory environment that is completely open-ended and unknowable even in principle." Importantly, he concludes that "the FCC can achieve its goals for an open Internet without importing the archaic principles and onerous restrictions embedded in Title II that stifle investment and innovation and cause job losses."
The ill-advised and politically motivated decision to reclassify broadband Internet access service under Title II represented an unnecessary and unwise turn for the economy and consumers. Comcast strongly agrees with the FCC’s decision to move forward with a proceeding to reverse that harmful ruling, and recommends reinstating the previous longstanding classification of broadband Internet access service as an interstate information service – a bipartisan approach that not only was the appropriate legal and policy classification, but also paved the way for the Internet to flourish and thrive.
Ultimately, we maintain that the best way to end this regulatory ambiguity is for Congress to pass bipartisan legislation. And yet, we also recognize that consumers deserve to be protected, regardless of the political tug of war. The FCC can take appropriate measures now, rooted in strong legal precedent, to provide a regulatory framework that ensures a free and open Internet.
In addition to reclassifying broadband Internet access service as an information service, these FCC efforts can include the adoption of clearly defined net neutrality principles – no blocking, no throttling, no anticompetitive paid prioritization, and full transparency. We believe the FCC’s actions to safeguard Internet openness while promoting greater broadband investment and innovation – coupled with ongoing commitments made by multiple ISPs, including Comcast, to open Internet protections – can provide a bridge to the time when Congress enacts a bipartisan legislative solution.
In short, we support the FCC’s return to a light-touch regulatory framework for broadband Internet access service – the same approach that helped build today’s Internet – and to determine the best path forward for maintaining sensible open Internet protections without reliance on Title II.
We applaud the open and transparent process instituted by Chairman Pai and supported by Commissioner O’Rielly, in particular, their support for real economic data being placed in the record. We look forward to reviewing and commenting on the other significant comments filed in the docket, and appreciate the Chairman’s commitment toward transparency throughout the FCC process.
Consumers deserve relief from a never-ending game of regulatory ping pong that harms them, the Internet, and ultimately, the American economy. We encourage Congress to come together to enact bipartisan legislation and welcome the FCC’s efforts to stimulate an open dialogue and take action to ensure that consumers are protected, while promoting continued investment and innovation in broadband. And legislation will avoid the potential of years more of litigation, a cycle that has lasted almost a decade.
Just as a consensus has developed on the propriety of strong and enforceable net neutrality rules, there is a growing consensus that bipartisan congressional legislation is the best vehicle to accomplish that shared objective. This is the argument that we at Comcast have made, that our trade association, NCTA-The Internet & Television Association, has made, and that is now being made by a growing chorus of voices. For example, tech leaders who support net neutrality recognize there is a role for Congress to play. Last week, Facebook CEO Mark Zuckerberg wrote, "We’re also open to working with members of Congress and anyone else on laws to protect net neutrality." The co-founder of Reddit, Alexis Ohanian, in an interview with Politico said, "I think we all believe that this is going to end up being a legislative decision, a legislative action – because all of our lawmakers in the House and Senate are going to realize, if they don’t already, that every one of their constituents wants net neutrality."
Both Republican and Democratic policymakers recognize that bipartisan collaboration is the answer for consumers, investment, and innovation. Senator Michael Bennet (D-CO) tweeted, "The internet was built to be open and free. We should work together to protect #NetNeutrality." Senator John Thune (R-SD) in a Recode op-ed stated that the best way to end "regulatory uncertainty and recurring threats of litigation" is "an enduring, bipartisan law from Congress." Representative Greg Walden (R-OR-2) has called on "Democratic colleagues, edge providers and ISPs" and all those in the "diverse internet ecosystem" to "come to the table and work with us on bipartisan legislation that preserves an open internet."
We agree. That is what our customers want, and we’ll continue to deliver a free and open Internet – with or without rules or legislation.