Net neutrality proponents haven’t quite gotten their finger on what the open network concept is supposed to be about. Color of Change used to harp on the civil rights aspect. Our rights to free speech were going to be violated by big corporate interests, according to Color of Change.
Then it was about consumer choice. Consumers would not be able to access the websites of their choice, the argument went. Without net neutrality, Comcast and Verizon would drive information consumers to their proprietary websites, which, according to Free Press, is the reason we should be wary of the NBC Universal-Comcast merger.
Color of Change and Free Press have even gone the populist route (probably borrowing a page from the Obama playbook) that the corporate takeover of broadband access to the Internet can be likened to the corporate greed exhibited by large financial companies during the credit market meltdown. Color of Change’s James Rucker has even taken issue with the alleged 80% profit broadband providers received from providing broadband access.
As usual, neither Color of Change or Free Press have provided any quantitative support for their assertions. I mean a little regression analysis or a chart where a credible source is cited would be nice every now and then. Or maybe cite the case law that supports their position that the FCC can reclassify broadband access without so much as a howdy do from Congress.
Unfortunately, for too many Americans, what net neutrality may mean is lost jobs and lost economic opportunity. The U.S. Department of Labor released its June jobs report last Friday. The economy lost 125,000 non-farm payroll jobs in June. While the unemployment rate fell to 9.5%, it was a result of over 600,000 people leaving the labor force.
This tepid growth in employment may be severely reversed should net neutrality rules go into effect. According to a report released last week by the Advanced Communications Law and Policy Institute at New York University Law School, at the current rate of annual investment in plant and facilities, broadband providers and other ancillary services in the Internet industry are expected to generate 509,000 jobs between 2010 and 2015. The Institute expects this result after annual investments of approximately $30 billion over this five year period.
The Institute also concluded that if annual investment were increased by five percent per year, the broadband industry could generate an additional 405,000 jobs between 2010 and 2015. Mind you, this is in addition to the 509,000 I’ve already mentioned.
Net neutrality rules, however, would have the opposite effect. The Institute’s conservative estimate is that net neutrality rules, as envisioned by the FCC and its supporters, may lead to a ten percent decrease in broadband investment. This decrease in investment may lead to 502,000 jobs lost and an annual loss in GDP of $62 billion a year, according to the Institute.
Sixty-two billion dollars a year may sound like a drop in the bucket in a $14 trillion economy but when you apply a conservative multiplier to that number, the ripple effects amount to, by my estimate, $155 billion a year. That comes up to the amount that we are paying for President Obama’s health care plan.
Free Press, as I mentioned before, tried to make the weak argument that corporations were at the heart of the economic and financial meltdown. Any student of economics will tell you that at the heart of any economic meltdown is the reduction in capital investment and incomes. Given the 15.5% unemployment rate for black Americans, any interventionist regulatory concept that would lead to an additional stifling of economic opportunity amounts to, in my opinion, a high-tech lynching. Why the FCC, Free Press, and Color of Change can’t see this is beyond me.