Wednesday, May 25, 2016

CTIA Survey Shows Decline in Wireless Capital Investment

CTIA – The Wireless Association released its Annual Wireless Industry Survey on May 23, 2016. From the end of 2014 to the end of 2015, wireless data usage increased by 138 percent, the number of wireless subscribers increased by 6.3 percent, and wireless penetration increased by 5.7 percent. Also, wireless-only households slightly increased by 1.3 percent, which is consistent with findings from a recent NTIA study and a Pew Research report that consumers are substituting mobile broadband for fixed broadband.
Most importantly, CTIA’s annual survey finds that capital investment declined by 0.3 percent from the end of 2014 to the end of 2015. This is not a huge drop, but after a 3.0 percent decline over the previous year, it seems as if capital investment is trending in the wrong direction.
FSF scholars have often stated that Internet regulation harms capital investment. This negative trend in broadband capital investment is consistent with the regulatory uncertainty surrounding the FCC’s Open Internet proceeding. The costly regulations levied on wireless providers and the regulatory uncertainty regarding the legality of the Order (because it is currently under appeal) likely has crowded out private investment leading to a decline over the past two years. Hopefully, the D.C. Circuit Court will overturn the FCC’s Open Internet Order, freeing up resources for broadband providers to invest and innovate and allowing consumers to enjoy more access and better connections.