Ajit Pai offers no data for latest claim that net neutrality hurt small ISPs
With days to go before his repeal of net neutrality rules, FCC Chairman Ajit Pai issued a press release about five small ISPs that he says were harmed by the rules. Pai "held a series of telephone calls with small Internet service providers across the country—from Oklahoma to Ohio, from Montana to Minnesota," his press release said.
On these calls, "one constant theme I heard was how Title II had slowed investment," Pai said.
But Pai's announcement offered no data to support this assertion. So advocacy group Free Press looked at the FCC's broadband deployment data for these companies and found that four of them had expanded into new territory. The fifth didn't expand into new areas but it did start offering gigabit Internet service.
These expansions happened after the FCC imposed its Title II net neutrality rules. (Title II is the statute that the FCC uses to enforce net neutrality rules and regulate common carriers.)
ISP doubled its rural coverage
One of the five ISPs that Pai says was harmed by the rules, AirLink Internet Services in Oklahoma, "more than doubled the number of rural Census blocks in which it offered service after the adoption of the [February] 2015 decision it criticizes," Free Press Policy Director Matt Wood wrote in a new FCC filing.
The data AirLink submitted to the FCC shows that it went from serving 1,482 rural Census blocks at the end of 2014 to more than 3,000 rural blocks by mid-year 2016, he wrote. The company expanded in urban Census blocks as well, going "from 4,251 such blocks to 7,108—an increase of more than 67 percent."
The population served by AirLink increased by 64 percent in rural areas and 59 percent in urban areas, Wood wrote.
Three of the other four providers grew in size. For example, "InvisiMax [in Minnesota and North Dakota] expanded its coverage by 42 percent in terms of the number of rural blocks reported, and by more than 15 percent in urban blocks. Its population coverage expanded by 23.4 percent and 22.5 percent in rural and urban blocks, respectively."
The fifth provider, Amplex Internet in Ohio, is the only one of the five "that did not report an increase in terms of its geographic service territory, population coverage, or both," Wood wrote.
But Amplex went from having no gigabit-speed fiber offerings at the end of 2014 to having "fiber-to-the-home service availability in at least 18 census blocks" by mid-2016. The company offers 1Gbps upload and download speeds for $80 a month.
Sjoberg's Inc., a cable ISP in Minnesota, went from zero Census blocks with fiber to 109 Census blocks with fiber during the same period.
Expansions not mentioned by Pai
You wouldn't know any of these ISPs had expanded their networks or upgraded their service offerings if you just read Pai's press release. "[H]eavy-handed regulation is making it harder for smaller providers to close the digital divide in rural America," Pai said. "By lightening the regulatory burden from Washington, we will unleash providers to do what they do best: serve their communities and provide broadband access to residents across the country."
According to Pai, InvisiMax says it has "spen[t] more on attorneys and consultants instead of consumers over the last two years," and that the repeal of net neutrality will allow it to grow its business and have "greater confidence in making investments."
AirLink, according to Pai, says it has invested less in its network than it would have if the rules didn't exist. Sjoberg's Inc., meanwhile, told Pai that the interest rate charged by its bank increased because of the "uncertainty" caused by net neutrality rules.
Pai has also claimed that network investment is down industry-wide because of net neutrality rules. However, publicly traded ISPs have told investors that the rules have not hurt their investments.
False claim that FCC sets broadband prices
The five small ISPs also filedex parteletters describing their meetings with Pai. Blackfoot, an ISP in Montana, falsely claimed in its letter that the net neutrality rules determine what prices ISPs may charge their customers.
The rules "give the FCC—not local service providers who live, work and raise families in the same rural communities as the customers they serve—the authority to determine what broadband offerings and prices are best for rural consumers," the letter said.
Of course, the net neutrality rules do no such thing, and the ISP did not cite any specific rule that restricts what prices it may charge.
The core net neutrality rules prevent ISPs from blocking, throttling, or prioritizing Internet content in exchange for payment. The ISPs' status as common carriers allows consumers to complain if the ISPs charge unjust or unreasonable prices, a stopgap meant to prevent truly egregious behavior. But there are no price caps and there no examples of the FCC telling an ISP to charge lower prices under this process.
The ISPs' presentations were "rife with such vague statements and outright errors" but did not include any "dollar signs, deployment data, [or] any other quantifiable metric demonstrating the supposed impact of Title II," Wood wrote.
"Perhaps this is because there is no quantifiable harm from Title II, only the anecdotes that these carriers provide when called upon by the Chairman," he wrote.
None of the five providers reported any figures "measuring the amount by which their investments or deployments had declined," Wood also wrote. "One might have supposed they'd be eager to offer such data, especially to a Chairman who so often congratulates himself on his alleged fondness for rigorous cost-benefit analysis, and on his rumored demand for real economic proof. But the filings are silent on the subject."
According to the ISPs' ex parte filings, the only FCC staffers who participated in Pai's meetings with the ISPs were his spokespeople. The absence of staffers involved in research or policy, combined with the timing of the calls and Pai's press release, suggest that "these meetings occurred for the sake of managing public appearances rather than obtaining meaningful record evidence," Wood wrote.
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