Net Neutrality, Reclassification and Investment: A Further Analysis

Central to the debate over the Federal Communications Commission's reclassification of broadband as a "common carrier" telecommunications service under Title II of the Communications Act of 1934 is the effect on broadband network investment. In April 2017, the Phoenix Center released its first statistical analysis of the investment question and found that between 2011 and 2015, telecommunications investment differed from expectations by between 20 percent and 30 percent, or about $30 to $40 billion annually. That is, over the interval 2011 to 2015, another $150-$200 billion in additional investment would have been made "but for" Title II reclassification. In this paper I expand my statistical analysis, restricting the analysis to investments in property and equipment (thereby excluding investment in intellectual property), altering the control group, and evaluating other modifications to the statistical model. My prior results are confirmed in this updated analysis, again finding "that investment in total fixed assets would have been about $30 billion more annually" and "[i]nvestment in equipment and property would have been $20 billion more 'but for' reclassification."