After Network Neutrality Repeal, AT&T Slashes Investments, Cuts Jobs

One of the selling points for repealing network neutrality was that it would spur investment and create jobs. It seems that the opposite is happening.

Network neutrality is the principle that ISPs treat every packet that flows through their networks equally. Nothing is favoured and nothing is blocked. So, there is no fast lanes or filtering. Many point out that fast lanes ultimately picks winners and losers on the Internet. Filtering, of course, is an attempt to slow down traffic for various protocols.

While some initially were skeptical, America had network neutrality laws thanks to the Obama administration. However, the Trump administration took over. Many argue that because Obama put it in place, Trump was highly motivated to get rid of it. So, in 2017, with a strong push from the Trump administration, the Republican controlled FTC voted 3-2 to repeal Network Neutrality.

Republican’s tried to sell Network Neutrality as some sort of “government takeover”. They also argued that it would spur free speech and build competition. Of course, all of this was a complete fabrication. Those who actually have a proper understanding of how the Internet works would know the opposite is true. Another selling point is that with the repeal of network neutrality, it would spur network investment and create jobs. Unsurprisingly, that selling point was also less than truthful.

According to Arstechnica, big US ISP AT&T is currently slashing billions from its investments and cutting jobs. From the report:

AT&T slashed capital expenditures by more than $1.6 billion in 2019 and projects a capital-investment cut of more than $3 billion in 2020.

AT&T’s capital expenditures for the full year of 2019 totaled $19.64 billion, down from $21.25 billion in 2018, an AT&T investor briefing released yesterday said.

In addition to the drops in capital spending, AT&T continues cutting jobs despite Stephenson previously claiming that AT&T would use a corporate tax break to create “7,000 hard-hat jobs.” As we noted in a story yesterday, AT&T had 247,800 employees at the end of 2019, down from 268,220 one year earlier. That’s a 7.6 percent drop in employment.

The new earnings report “shows that AT&T continues to cut jobs and reduce capital expenditures even as the company announced record operating and free cash flow for 2019 and more than $5 billion in stock buybacks in the past four months,” the Communications Workers of America (CWA) union said in a statement. “The company has cut 37,818 jobs since the Tax Cuts and Jobs Act (TCJA) went into effect in 2018, including 4,040 in the fourth quarter of 2019.”

The report also points out that other big US ISPs are also undergoing a similar process of slashing investment and jobs.

If there is a silver lining in all of this, stories like this serves as a warning for other countries on what will happen if network neutrality is repealed. Other countries have received similar pushes from the ISP industry to either stop plans for network neutrality rules or repealing rules that enforce network neutrality. If you do the bidding of the ISPs, you’ll simply get burned after. All the push to repeal network neutrality does is help consolidate power for the ISPs. It benefits the big corporations and leaves consumers to pay for it in many different ways.

Drew Wilson on Twitter: @icecube85 and Facebook.



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