Reclassification and Investment: A Statistical Look at the 2016 Data

A regulatory revival at the Federal Communications Commission during the Obama Administration dramatically curbed capital spending on broadband infrastructure. Since the specter of reclassification was first introduced by then-Chairman Julius Genachowski in 2010, investment has consistently been at least 20% below expectations. More recently, significant attention has focused on the reductions in infrastructure investment following the 2015 Open Internet Order (adopted on February 25, 2015). Data from USTelecom and CTIA, for instance, show sizeable declines in capital spending in 2016, the year following the decision. Even Free Press, an advocate for Title II, offers evidence that real investment declined in 2016. Given the importance of broadband infrastructure deployment in the modern economy, the decline in capital spending will almost certainly play a role in the current FCC’s proposal to reverse the reclassification decision and the legal defense of that decision.