Tom Stanton, Adtran (Satire) Company CFO's haven't confirmed. Adtran's Tom Stanton saw his stock go down -0.73% today while the market went up +1.47%. Scott Belcher, Tom's handpicked TIA chief, issued a press release predicting "a slowdown in capital investment," after the U.S. Net Neutrality order. Stanton is more vulnerable to a U.S. slowdown than any other large telecom vendor because over 60% of his sales are in the U.S. Adtran has done a remarkable job winning a large vectored VDSL contract in Germany in a fierce competition with Alcatel. To grow in Europe, they've had to accept much lower margins than in the U.S., making any U.S. cutback even more painful. 

    The U.S. is also a crucial market for wireless suppliers Alcatel & Ericsson. Both Verizon and AT&T have covered over 90% of the U.S. with LTE and are slowing down. Any further cutbacks would be particularly painful. Ericsson has just announced 2,000 layoffs and I've lost track of how scott-belcher-180x146many people Alcatel has let go.  Alcatel and Ericsson are being propped up by a cartel arranged by the EU and China. Each is given about 10% of the Chinese market and Huawei is no longer bidding as aggressively for European contracts. The EU had to threaten huge tariffs to protect these "national champions."

Both are extremely able companies but were scaled to grow while the telecom equipment market has been flat to down for about a decade. 

    Among those who have said the Net Neutrality order would not have a significant effect on capital spending are the CFO's of AT&T and Verizon. A few months ago, AT&T cut an astonishing $4B from capital spending, the decade's largest telco capex cut anywhere in the world. Verizon, CenturyQwest and the others have been flat to down in capex measured in nominal dollars for years.  

    Competition, technology change and market growth are the primary drivers of investment. Regulation primarily affects the level of profits. It's bad form for a lobbyist to explain they are looking to increase corporate profits, but that's what they usually mean when they discuss "incentives for investments." There's no public purpose in "incentives" that don't work.

Tom Tauke of Verizon was one of the last lobbyists who could make their point while sticking to the facts.

Ed. note: Everything I wrote here is true. The price did go down but that was probably coincidence.  What Belcher said is a "politician's truth." 

 

FCC Net Neutrality Order Confirms that Plan will Impact Investment, Open Door to Heavy Regulation

Arlington, Va. (Mar. 12, 2015) – The Telecommunications Industry Association (TIA), the leading association representing the manufacturers and suppliers of high-tech communications networks, today commented on the net neutrality order issued by the Federal Communications Commission (FCC).

TIA CEO Scott Belcher released the following statement:

“The FCC order confirms that Title II is a Trojan horse that will open the door to heavy government control of the Internet and create marketplace uncertainty. With Title II in place, there is little to stop future commissioners from instituting government price controls or other market-distorting regulations. The FCC’s promise of a light-touch approach is just that – a promise. There is too much at stake to allow the future of the Internet to rest upon a simple promise.

“Regardless of how far the FCC pushes its future authority, the immediate uncertainty created by this plan will produce a slowdown in capital investment.  Consumers and small businesses, who have benefited enormously from the existing regulatory landscape, will bear the burden of a less robust network.  TIA is committed to working with Congress to achieve a bipartisan alternative that clarifies the FCC’s legal authority and assures a light-touch approach to net neutrality.”

The world needs a good news source on Internet and telecom policy. I hope to create one. Catch a mistake? Email me please.  Dave Burstein

Latest

Professor Noam's "Many Internets" http://bit.ly/ManyNets

Until about 2010, everyone agreed the Net was a "network of networks," not a monolithic entity. There was a central authority, ICANN, keeping track of domain names, but that was a minor administrative function.
Columbia Professor Noam suggests we might be better off accepting that some nations or groups might want to organize their networks differently. It's easy to see demand for an Internet with much more effective filters against material some think harmful to children. (Any 10 year old can easily find porn today. Many do.)
Internet translation is getting better very quickly. You might want an "Internet" that translates everything into your language. Google Chrome translation isn't perfect but I was able to research most of this story on Russian language sites. With a few more years progress, I might welcome an alternate that brings me everything in English, including caching for better performance.
De facto, Internet news is already split, as hundreds of millions only get their news from Facebook. Google AMP pages, including for news, also favor selected parts of the net
Centralizing the DNS doesn't prevent censorship, as the Chinese have demonstrated. There are many Jewish and Muslim fundamentalists who want to block what they consider blasphemy and limit free speech. See http://www.nytimes.com/2012/05/21/nyregion/ultra-orthodox-jews-hold-rally-on-internet-at-citi-field.html . More from Noam http://bit.ly/ManyNets

Russia Orders Alternate Root Internet System http://bit.ly/RussiaDNS
It's actually practical and not necessarily a problem.The Security Council of the Russian Federation, headed by Vladimir Putin, has ordered the "government to develop an independent internet infrastructure for BRICS nations, which would continue to work in the event of global internet malfunctions ... This system would be used by countries of the BRICS bloc – Brazil, Russia, India, China and South Africa." RT
Columbia University Professor Eli Noam and then ICANN CEO Fadi Chehadé have both said such a system is perfectly practical as long as there is robust interconnection.
Actually, the battle over ICANN and domain names is essentially symbolic. Managing the DNS is a relatively insignificant task, more clerical than governing. ICANN Chair Steve Crocker pointed out they had very little to do with policy.
Some will claim this is about blocking free speech but that's rhetoric. Russia doesn't need to fiddle with the DNS for censorship, as the Chinese have demonstrated. The wonders of the Internet will continue so long as the resulting nets" are robustly connected. The ICANN and U.S. policy goal should be to help create that system for interconnection.
I expect contentions that “The Russians are taking over our Internet” and “They are splitting the Internet.” The Internet is a “Network of Networks.” It is not a monolith so what would “splitting” it mean or do?
After the WCIT, China realized that ICANN and the DNS are side issues not worth bothering about. They have been building alternate institutions including the World Internet Summit in Wuzhan and the BRICs conferences.  The Chinese have put their main work where decisions that matter are made. Wireless standards are set by 3GPP, where nothing can be approved without China's consent.
The American battle at ITU is proving to be a historic mistake.
Why does Russia want an independent Internet?
They fear that Western sanctions on Russia could cripple the Russian Net. Communications minister, Nikolay Nikiforov, worries about, "a scenario where our esteemed partners would suddenly decide to disconnect us from the internet." I think that's highly unlikely but Nikiforov points out, “Recently, Russia is being addressed in a language of unilateral sanctions: first, our credit cards are being cut off; then the European Parliament says that they’ll disconnect us from SWIFT."
It makes sense for the Russians to be prepared for such a contingency as the Cold War has been warming up on both sides. "Britain's top military chief Air Chief Marshal Sir Stuart Peach just made headlines warning Russian subs "could CRIPPLE Britain by cutting undefended undersea internet cables." Much more http://bit.ly/RussiaDNS

ICANN Continues Excluding Russia & China From the Board http://bit.ly/CEOPromises
No wonder Russia wants an alternate root. Three years ago, ICANN CEO Fadi Chehadé promised "a seat at the table" to Chinese Premier Li. ICANN welched and this year added two more Americans.
Almost all the ICANN board is from the U.S. and close allies; only about 4 of the 18 board members are from countries on the other side of the North/South divide in Internet policy.  Claiming ICANN represents the Global Internet is inappropriate. China is 1/3rd of the Internet but has no representation on the board.
I know many of the board members. They are all basically honorable but generally share a strong opinion on North-South issues.
Larry Strickling of the U.S. government knew just what he was doing with the IANA transition. He handed over to a board with similar positions as the U.S. government.
"The system is unsustainable while it excludes half the world," I have been saying since 2012. More, including the transcript of Fadi's statements,http://bit.ly/CEOPromises

Sorry, Ajit Pai: Smaller Telcos Did Not Reduce Investment After NN Ruling http://bit.ly/SorryPai
Pai justifies his NN choice with the claim, "The impact has been particularly serious for smaller Internet service providers." #wrong (Actually, NN has minimal effects on investment, up or down, I’m convinced. Competition, new technology, customer demand and similar are far more important.)
The two largest suppliers to “smaller ISPs” saw sales go up. Adtran's sales the most recent nine months were $540M, up from $473M the year before. 2016 was $636M, 2015 $600M. Calix the last nine months sold $372M, up from $327M. The full year 2016 was $459M, up from $407M in 2015. Clearfield, a supplier of fiber optic gear, was up 8% in sales in the smaller ISPs.
There is nothing in the data from others that suggests an alternate trend. Anyone could have found this data in a few minutes from the company quarterly reports.
The results in larger companies are ambiguous. I can "prove" capex went up or went down by selecting the right data. The four largest companies' capex - two/thirds of the total - went up from $52.7B in 2015 to $55.7B in 2016. The result remains positive after making sensible adjustments for mergers and acquisitions. That's as close to "proving" that NN led to increased spending as the facts chosen to prove the opposite.
Actually, whether capex went up or down in 2016 tells us almost nothing about the choice on neutrality. Everyone knows a single datapoint could be random or due to other causes. Much more, including the source of the errors http://bit.ly/SorryPai

Elders Bearing Witness: Vint, Timbl, & Many More http://bit.ly/VintTim
Vint Cerf, Tim Berners-Lee, Steve Wozniak and more than a dozen true Internet pioneers wrote Congress to protect Neutrality. The best Congress money can buy didn't listen but I wanted to reproduce their letter.
I hope they are wrong believing "is an imminent threat to the Internet we worked so hard to create." My take is the impact will be moderate in the short run.
From the letter:
We are the pioneers and technologists who created and now operate the Internet, and some of the innovators and business people who, like many others, depend on it for our livelihood. ... The FCC’s proposed Order is based on a flawed and factually inaccurate understanding of Internet technology. These flaws and inaccuracies were documented in detail in a 43-page-long joint comment signed by over 200 of the most prominent Internet pioneers and engineers and submitted to the FCC on July 17, 2017.
Despite this comment, the FCC did not correct its misunderstandings, but instead premised the proposed Order on the very technical flaws the comment explained. The technically-incorrect proposed Order ... More, including the full list, http://bit.ly/VintTim