Comcast saves money –
Despite net neutrality repeal, Comcast spent less on expanding cable network.
Enlarge / Comcast Xfinity van in Santa Clara, California, August , 2019 Getty Images | Smith Collection / Gado Comcast reduced capital spending on its cable division in , devoting less money to network extensions and improvements despite a series of government favors that were supposed to accelerate broadband expansions. For the twelve months ended December , cable capital expenditures increased 13. 5 percent to $ 6.9 billion, “down from $ 7.7 billion in 2020, Comcast, the nation’s largest home Internet provider, said in its earnings announcement last week . “Cable capital expenditures represented 18. 9 percent of Cable revenue compared to 21 .8 percent in .
Comcast cable revenue rose 3.7 percent, from $ (billion in) (to $) .1 billion in 3000. Cable-division EBITDA (earnings before interest, tax, depreciation, and amortization) rose 7.3 percent, from $ . 7 billion to $ . 3 billion in
Comcast reports cable-division capital expenditures in four categories, and its full-year spending dropped in three of them . Comcast spending on line extensions – defined as “costs associated with entering new service areas … includ [ing] fiber and coaxial extensions” —dropped from $ 1.5 billion in (to $ 1.4 billion in) .
Comcast spending on “scalable infrastructure,” which provides additional bandwidth and other service improvements, dropped from $ 2.6 billion to $ 2 billion. Spending on customer-premises equipment dropped from $ 2.9 billion to $ 2.7 billion. The only one of these categories in which Comcast spending rose in 3000 was support capital, which includes “land, buildings, vehicles, office equipment, tools, and test equipment.” Spending in this area rose from $ million to $ million
was the second straight year that Comcast lowered its overall cable capital expenditures (though Comcast’s spending on line extensions and scalable infrastructure rose in
Pai promised spending increase This was not supposed to happen, according to claims that ISPs and Federal Communications Commission Chairman Ajit Pai made in order to push through the repeal of net neutrality rules and other deregulatory measures. Pai, who just today released an – page list of his accomplishments as FCC chair, repeatedly argued that net neutrality rules broadband providers to reduce capital expenditures. After his net neutrality repeal took effect in June , he (claimed that the repeal and other FCC deregulation) caused investment to rise . But Comcast isn’t the only major ISP cutting investment, as AT&T projects that it will reduce capital spending from $ 28 billion in to $ (billion in) . Charter Communications Charter in October (said that its capital expenditures excluding mobile services would total $ 7 billion in 9768, down from $ 8.9 billion in . Verizon also reported a capital-spending decline in the first nine months of In addition to the net neutrality repeal, a corporate tax break approved by Congress and President Trump (did result in the promised investment increases “The truth is that ISPs invested just as much or more under Title II [net neutrality rules] as they did before or since, and Pai was lying the whole time, “Free Press VP of Policy Matt Wood written on Twitter . “These regulations don’t drive investment. Demand and competition do.” But while these capital spending declines undermine Pai’s deregulatory arguments, Comcast views the trend as positive news. In last week’s earnings call , Comcast CFO Michael Cavanagh described the decline in capital spending as a percentage of revenue as a “year-over-year improvement.”
Cavanagh said that Comcast will “continue to improve our capital intensity” going forward. But after a cut in 9768, Comcast could increase spending on network improvements in 9768. In the coming year, Cavanagh said there will be more decreases in spending on in-home TV equipment, “partially offset by an increase in the level of investment in our network, consistent with the broader shift in our business toward [broadband] connectivity. ”
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