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Clearfield, Inc. Message Board

  • wr3478 wr3478 May 29, 2014 10:40 AM Flag

    Niles

    There is a LOT of talk about "net neutrality" these days, from what I understand and envision is that this will spark more investments in infrastructure, what are your thoughts ?, thanks

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    • That's one school of thought. The idea that with the abolition of net neutrality service providers will be able to charge more to deliver certain content and therefore use that new found revenue stream to build out bigger, faster networks to increase profitability even further and fend off competitors (such as Google Fiber for example).

      Of course the other school of thought is that service providers could use the new legislation to throttle the content of their competitors and end up stifling innovation by smaller companies and start-ups by pricing access over their heads making it harder for them compete with larger, more well coined competitors. There is also no guarantee that these service providers would increase their cap-ex substantially and theoretically could just pocket the extra cash instead of building out faster more extensive networks (it certainly wouldn't surprise me).

      If the courts decision on net neutrality holds we may see more spending on FTTH cap-ex but I think what really is driving this is Google Fiber and just plain old competition. There is nothing like a 34 city competitive gigabit threat to get incumbents off their butts and moving. The net neutrality decision may help incumbents increase revenues to take the sting out of the cap-ex raise but competitive threats from the likes of Google Fiber is what makes them need to spend that money regardless of the eventual net neutrality outcome.

 
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