Broadband Capital Expenditures Once Again on Upward Trajectory

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.

The 2017 increase comes after a two-year decline during which annual broadband capital expenditures fell a total of $3.2 billion, from $78.0 billion in 2014 to $74.8 billion in 2016. This spending dip began when the Federal Communications Commission (FCC) moved to impose common carrier regulatory classification—commonly known as Title II—on broadband providers in 2015. Growth returned after a series of pro-investment steps taken by the FCC and Congress, including the Restoring Internet Freedom Order, the tech transition order and tax reform. While many factors are at play, the parallel shifts in policy and capex suggest that policy expectations played a role, warranting additional analysis.