Net Neutrality & Investment

By Bruce

Last week, Entropy Economics released a detailed report on the effects net neutrality would have on jobs. After examining the official comments submitted to the FCC, Entropy found that those who could be counted as “Net Neutrality Skeptics” directly employ 1,440,021 people. “Net Neutrality Supporters,” meanwhile, only employ 148,936 — a difference of 10 to 1.

The Entropy report also looked at the amount of Capital Expenditures for skeptics and supporters, and the result was even more startling. From an article at Digital Society by the report’s author, Bret Swanson (who is also an IIA Broadband Ambassador):

We have often noted the communications sector’s important capital investment role in the U.S. economy. In 2008, U.S. info-tech capital investment totaled $455 billion, or 43% of all U.S. non-structure investment. The communications service providers alone invest $65 billion or more annually. Among companies filing FCC comments, the Net Neutrality Skeptics invested $189 billion over the last three years, compared to $18 billion for the Net Neutrality Supporters. Two of the nation’s largest infrastructure investors, AT&T and Verizon, each have more employees than all the Net Neutrality Supporting companies combined.

Net neutrality supporters often dismiss the effect new regulations will have on private investment. But as the Entropy report makes clear, discouraging private investment from net neutrality skeptics would have a chilling effect on the U.S. economy. And with the FCC’s own estimates for the cost of a national broadband plan reaching as high as $350 billion, a reduction in private investment could put the goal of bringing broadband to everyone out of reach.