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US broadband investment increased by $1.5 billion in 2017, industry report says

Investment in broadband deployment increased by $1.5 billion in 2017, according to a research brief released Oct. 18 by USTelecom, a trade group representing telecommunications businesses.

The report suggests that the U.S. Federal Communications Commission's reclassification of broadband as a Title I service under the Communications Act may have played a factor in the investment growth in 2017. The FCC's 2018 Restoring Internet Freedom Order gave the FCC less authority over internet service providers and eliminated the agency's federal net neutrality rules.

U.S. broadband investment rose steadily from $64.5 billion in 2009, as the financial recession ended, until 2014, when it hit a peak of $78 billion, according to data provided by USTelecom. Investment was down from its 2014 peak in 2015 ($77.5 billion) and 2016 ($74.8 billion). In 2015, the commission moved to classify broadband as a Title II service, which made broadband a more heavily regulated service and imposed net neutrality rules, which prohibited network operators from blocking or throttling legal internet traffic or prioritizing certain traffic in exchange for payment.

"The decline in the series in 2015 and 2016, followed by a return to growth in 2017 when the FCC had indicated its intention to repeal the Title II classification, suggests that expectations regarding common carrier regulation may have been a factor and warrants further investigation and analysis," wrote Patrick Brogan, vice president for industry analysis at USTelecom.

Federal Communications Commission Chairman Ajit Pai said the report validates the commission's strategy on broadband policy under his leadership.

"Today's report confirms that the FCC's policies to promote broadband deployment are working," Pai said in an Oct. 18 press release. The $1.5 billion gain in investment in 2017 marks "real progress for American consumers, and another step toward better, faster and cheaper broadband for all Americans," he said.

The FCC's 2018 broadband deployment report found that 24 million Americans still do not have access to high-speed broadband at home. Many U.S. wireless providers are working to launch 5G services in 2019, including mobile broadband.

The media advocacy group Free Press, which supports strong net neutrality protections, has previously challenged USTelecom's methodology for calculating broadband investment, calling it "opaque." The group has also contested claims that the previous Title II classification for broadband had a negative impact on investment.