Net Neutrality: The real economic impact

Both sides of the debate claim economic benefits


It seems that the battle for net neutrality has boiled down to an argument over economics. Dueling reports paint vastly different visions of the economic outlook for the broadband and Internet industries should the FCC be successful in imposing net neutrality guidelines.

On the one hand, you have Dr. Coleman Bazelon and The Brattle Group, with a 23-page report titled "The Employment and Economic Impacts of Network Neutrality Regulation: An Empirical Analysis." The report, funded by a group called Mobile Future which includes AT&T among its membership, seems to reflect the views of the major corporate players opposing net neutrality. Here are the key findings:

  • Revenue growth in the broadband sector could slow by about one-sixth over the next decade

  • Broadband sector jobs lost could be expected to total 14,217 in 2011, growing to 342,065 jobs by 2020

  • Economy-wide, 65,404 jobs could be put in jeopardy in 2011, with the total economy-wide impact growing to 1,452,943 jobs affected by 2020 due to reduced revenue growth in the broadband sector

With the economic turmoil the United States has gone through recently, and the massive job losses experienced over the past few years, any implication that a legislative measure could result in additional job losses or economic adversity is guaranteed to create a political minefield. Based on The Brattle Group report, net neutrality is obviously not a good idea.

On the other hand, another report titled "Free to Invest: The Economic Benefits of Net Neutrality" from the Institute for Policy Integrity at the New York University School of Law concludes "While opponents of net neutrality are correct that it may have some downsides, including decreased investment incentives for ISPs and potential impacts on technological development, the government has tools at its disposal to mitigate these downsides. Moreover, the benefits of net neutrality, especially maintaining investment incentives for the development of new content, are very high."

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