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BigGovernment.Com Blogs on ACI studies

editor — Fri, 05 Mar 2010 17:35:42 +0000

BigGovernment.Com has an activite blog underway that discusses the finding of ACI’s studies on Jobs, consumer welfare, and (most recently) IT innovation. To read the piece and contribute their blog, click here.

“Think Tank: Net Neutrality Rules Harmful, Unnecessary” — Wireless Week Cites ACI Study on Innovation and Links To Video Interviews

editor — Wed, 03 Mar 2010 14:45:15 +0000

To read Maisie Ramsay’s Wireless Week article “Think Tank: Net Neutrality Rules Harmful, Unnecessary,” please click here.

Click Here for ACI’s Entire Study — innovation-final

Click Here for ACI’s Summary Release

Click Here for NextGen Web summary and vidoes

Study Finds Unregulated Broadband Market is Key to Innovation

editor — Tue, 02 Mar 2010 13:26:00 +0000

Net Neutrality Will Hurt Private Investment, Impede Consumer Friendly Innovations

WASHINGTON - The American Consumer Institute released today a study on innovation by companies in the Internet ecosystem. The study, which surveyed available data and literature, found that broadband network providers are a leading source of both innovation and new investment in Internet infrastructures.

The study found that new Internet regulations, including those now under consideration by the FCC, would restrict technology advances, innovation and job growth.

“All indications are that these well intended regulations would dampen both incentives and opportunities for firms in the Internet ecosystem to continue to invest and to embed new technologies in core networks on which downstream applications and content providers depend,” said Larry F. Darby, co-author of the study.

Other key findings include:

·         By any reasonable assessment, core cable, wireline and wireless networks reflect enormous historical and ongoing innovation as marked by adoption of new technologies, investment new equipment and software and the expansion and improvement of Internet services offerings;

·         These core innovations among cable and wireline have enabled, encouraged and increased the value of important edge innovations that would otherwise have been impossible. Without innovation in the core, there would be no innovaton at the edge;

·         There is no analysis or data in the enormous literatures on innovation and regulation to prove claims that the proposed net neutrality rules would on balance promote innovation in the Internet Ecosystem; and

·         Imposing common carrier type regulation on network providers would diminish network providers incentives and opportunities to continue historic trends in innovation and investment.

The study concludes: “Our review finds no market failure attributable to insufficient innovation in networks or superior innovation outside network infrastructures. Concerning the need for new regulations, the public interest will be well served if the Commission heeds the wisdom of Hippocrates: ‘First, do no harm!’ By any reasonable assessment of the record of innovation in networks, the current regulatory regime is working.”

Click Here for the Entire Study — innovation-final

Three ConsumerGrams: Internet Regulations Would Harm the Environment and Raise Consumer Prices

editor — Thu, 03 Dec 2009 12:22:04 +0000

Three Consumers address: how Internet regulations would harm the environment, by reducing broadband access to telecomuting, teleconferencing, distance learning and other applications; how Internet regulations would reduce consumer welfare; and how regulations that limit price discrimination would harm consumers and reduce network investment. To read ConsumerGrams click on the links below:

On the envirnoment … nn-and-the-environment

On the Effects on Consumer Welfare nn-and-consumer-welfare1

On the Effects on Consumer Prices nn-and-pricing

All Of The Evidence Concludes That Internet Regulations Would Reduce Consumer Welfare

editor — Tue, 01 Dec 2009 13:10:17 +0000

This ConsumerGram reviews studies that measure the consumer welfare effects of net neutrality regulation and finds that all of the studies find negative consequences of regulation, including higher consumers prices and reduced network investment.

Click here to read the ConsumerGram … nn-and-consumer-welfare

Recent Press Reports on ACI’s Hill Event

editor — Sat, 21 Nov 2009 16:24:02 +0000

There have been a number of news reports about ACI’s recent Capitol Hill Event, notably:

The Hill at http://thehill.com/hillicon-valley/605-technology/68555-essays-expound-flaws-of-net-neutrality, as well as reports in Comm Daily and TR Reports.

ACI Releases a Book, Holds a Capitol Hill Event: The Evidence on Net Neutrality

editor — Thu, 19 Nov 2009 17:43:20 +0000

FOR IMMEDIATE RELEASE

November 19, 2009

The American Consumer Institute Releases New Book on the Consequences of Net Neutrality

Authors Express Concerns at a Capitol Hill Briefing

WASHINGTON – The American Consumer Institute today hosted a panel discussion and debate entitled, “The Evidence on Net Neutrality” and released a new book, “The Consequences of Net Neutrality Regulations on Broadband Investment and Consumer Welfare.”

The event featured remarks by Rep. Gene Green (D-TX) and Rep. Marsha Blackburn (R-TN), followed by a panel discussion on the effects net neutrality will have on American consumers.

“Over the last five years there has been extensive evidence demonstrating that Internet regulations would reduce consumer welfare and impede broadband deployment. Over the same time period, there has not been a single empirical study showing that Internet regulations would benefit consumers or increase broadband investment,” said Steve Pociask, president of The American Consumer Institute. “Let today’s event and the release of our book serve to refresh the public record that the evidence is solidly against net neutrality regulations.”

The book is a collection of 13 essays authored by 11 senior economists and public policy experts, both Republican and Democrat. The book provides insight about consequences Net Neutrality regulations have on two economic concepts that affect broadband consumers: “price and demand” and “cost and supply.” During the panel discussion nine of the book’s authors as well as John W. Mayo of Georgetown University, Michael Calabrese of the New America Foundation and Barbara Esbin of the Progress Freedom Foundation discussed their findings and views on net neutrality.

“Restrictions and obligations on broadband providers, including wireless operators, have adverse pricing implications. This phenomenon is not unique to the wireless industry,” said Hal J. Singer of Empiris and contributing author to ACI’s book, “If you tell a sports club that it must permit anyone to offer personal training on its premises (via a duty-to-deal), then the price of the basic gym membership will rise. If you tell an airline that it can’t charge higher fares for first-class seats (via a non-discrimination rule), then the price of coach tickets will rise. Net neutrality means lots of things, but at the end of the day, it means higher prices.”

Everett Ehrlich of ESC, also a contributing author to ACI’s book, concluded, “The harder you look at it, the more net ‘neutrality’ looks like a prescription for getting the Internet stuck in neutral. I hope this book helps people understand the risks associated with this slogan.”

Download:

Hill Panel Bios, aci-event-panelist-bios

Executive Summary of the Book, aci-book-exec-summary1

Book Cover, consequences-the-cover1

The Entire Book, final-consequences-of-net-neutrality

The American Consumer Institute Center for Citizen Research is a 501(c)(3) nonprofit educational and research institute. For more information visit www.theamericanconsumer.org or email us at info@theamericanconsumer.org

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American Consumer Institute Releases Study Finding No Difference in Consumer Electronics Prices between Wal-Mart and Best Buy; Study Calls for Wal-Mart to Improve On-Shelf Labeling to Ensure Shoppers Can Make Educated Comparisons of Consumer Electronics

editor — Tue, 10 Nov 2009 11:22:32 +0000

NEWS RELEASE – For Immediate Release

Washington, DC (November 10, 2009) – Shoppers’ perception that Wal-Mart is the lowest-priced retailer for consumer electronics goods is incorrect, according to a new study, released today, by the American Consumer Institute (ACI).

The study’s findings are particularly significant considering that according to the Consumer Electronics Association, the average American household owns 23 consumer electronic products and has spent over $1,200 in the last twelve months. During this holiday season, 80% of consumers plan to buy consumer electronics for themselves or as a gift for others.

ACI also urges Wal-Mart to improve its shelf labeling on electronic products to help consumers make better-informed buying decisions.

The multi-part study included interviews of consumer electronics shoppers’ preferences by the Research Network; comprehensive in-store and on-line price comparisons by TeleNomic Research and a comparison of HDTV prices at Wal-Mart and Best Buy conducted by Deutsche Bank Securities.

Among the findings of the study were:

For retail electronic goods, consumers believe that product quality, knowledgeable staff and in store help are more important factors than retail price.
Shoppers rank Best Buy ahead of Wal-Mart in overall service, as well as in terms of higher product quality, more knowledgeable sales associates, ease in finding in-store assistance, wider electronics product selection and better post-sales support.
Consumers, particularly lower-income ones, believe that Wal-Mart offers lower prices for consumer electronics.
However, an analysis of a market basket of electronic products finds no significant difference — less than one half of one percent — between Wal-Mart’s and Best Buy’s consumer electronics products.
When the value of Best Buy’s free home delivery, hookup and used product disposal for HD TV’s are included in the market basket analysis, Best Buy’s effective price is lower than Wal-Mart’s price.

“Consumer electronic specifications can be very technical and complex. The survey shows that consumers want more information and in-store help,” said Steve Pociask, president of the American Consumer Institute. “But some labels in Wal-Mart stores provide virtually no usable information, other than price, that would enable consumers to shop, compare and save.

“The lack of information on its labels may contribute to the false perception that Wal-Mart is always lower-priced,” added Mr. Pociask. “We strongly recommend that Wal-Mart provide more complete on-shelf and on-line product information to its customers.”

The conclusion of insignificant price differences from the market basket analysis conducted by Telenomic Research is supported by an August 2009 consumer retail research report by Deutsche Bank Securities that found Best Buy maintained lower monthly average prices than Wal-Mart for identical models of HDTVs over the previous 11 consecutive months.

The study also suggests that shoppers do their homework first, shop around to compare product prices, watch for weekly sales – and consider delivery, installation and support costs before buying their consumer electronics.

For a copy of the report, click here … consumer-electronics-study-report. For a copy of the appendix of consumer survey results, click here … consumer-electronics-study-appendix

About the Research

Consumer survey of electronic shoppers by the Research Network in September 2009.

CE Industry Forecast provided to ACI by the Consumer Electronics Association, October 20, 2009.

Mike Baker and Adam Sindler “Best Buy: Trends Should Bottom This Quarter,” Deutsche Bank, Global Markets Research, August 31, 2009, page 4.

Wal-Mart vs. Best Buy Pricing Study, September 2009, TeleNomic Research, which received an unrestricted research grant from Best Buy.

About The American Consumer Institute Center for Citizen Research

The American Consumer Institute Center for Citizen Research is a 501(c)(3) nonprofit educational and research institute. The Institute focuses on economic policy issues that affect society as a whole, and seeks to be a better and more reasoned voice for consumers, by using economic tools and principles to show that markets work best for the benefit for consumers. We are committed to the use of generally accepted quantitative, cost-benefit analyses of policy alternatives and their transparent application to assure that our methods can be fully and fairly evaluated on their own terms and by those who may disagree with our conclusions. We use economic analysis to empirically measure “consumer welfare,” rather than relying on conjecture, opinion or political leaning to judge what benefits or harms consumers.

For more information on the American Consumer Institute, visit www.theamericanconsumer.org.

Media Contact:

Stephen Pociask

steve@theamericanconsumer.org

www.theamericanconsumer.org

FCC Chief Economists Asks Other Economists To Speak Up With Their Ideas; and Dr. Larry Darby’s Replies

editor — Fri, 30 Oct 2009 20:36:17 +0000

On October 27, the FCC’s Chief Economist asked for economists to “educate” the FCC on economics, in a posting on http://blog.openinternet.gov/?p=133. He concluded: “Economists: This is your opportunity to educate me and the Commission. Am I thinking about our task in a productive way? What other economic issues should be on my list?”

Today, Dr. Larry Darby, Senior Fellow at ACI and former chief Economist and Bureau Chief at the FCC submitted the following response …

“You asked two questions:

Am I thinking about our task in a productive way? You referred to possible market failures; market power; investment and innovation incentives; price discrimination; two sided platforms; efficient network operation; and, social welfare effects. These are interrelated and each suggests productive, and necessary, areas of economic inquiry. The challenge to you and other Commission economists will be a) to provide a consistent analytical framework for considering these and related economic issues and b) to insist relentlessly that maximizing consumer welfare be a central element of the Commission’s inquiries and objective function. That perspective too often gets lost in “public interest” rhetoric. In that context I am delighted by your mention of two sided platforms and price discrimination, since the Commission’s recognition of the role of each as sources of consumer welfare will be critical. Relatedly, perhaps the most productive task for Commission economists is to bring to bear the enormous amount of intelligence available in the economics literature as means of offsetting economically baseless conjectures by non practitioners.

What other economic issues should be on my list? Regulatory debates continue to center on market imperfections and the extent/type of government action needed to offset them. There is, however, an enormous economic and political science literature addressing imperfections in government processes and actions. Joe Stiglitz, Nobel prize-winner and former CEA Chairman of the President’s Council of Economic Advisors recently wrote: “Anyone who has watched the U.S. government in the last seven years is well aware not only of the possibility of government failure but also of its reality.” An important economic and policy issue going forward will be the need for, and the extent to which, the Commission’s policy decisions reflect a) clear and consistent assessments of different kinds of institutional failure and b) balancing at the consumer welfare implications of the infirmities of both private and public action.

Finally, I cannot emphasize enough the need for more facts and analysis respecting “innovation.” The record in several proceedings is full of assertions about innovations – their relative importance, their source, their motivators, the impact of regulation thereon, etc. Most of these are neither supported nor supportable by reference to the vast economic literature on the matter. Given the dynamic nature of information markets, the Commission cannot responsibly decide many of the issues before it on the basis of speculation and conjecture.”

Online Survey: Internet Consumers Want Lower Prices and Better Reliability, Security and Privacy

editor — Wed, 21 Oct 2009 12:48:41 +0000

Much of the quest for developing a nationwide broadband plan has centered on ubiquitous deployment and online speeds, some arguing for speeds well over 100 mbps. Other policy wonks have argued that we need more competitors and still others want lower prices. In response to one Internet Service Provider’s (ISP) attempt to slowdown bandwidth hogs and manage network congestion, the FCC responded by considering limits on ISP’s management of traffic, leading ISPs to point out that this would jeopardize online reliability, security and privacy, making their networks more subject to spam and malicious attacks. Many web centric firms, who store and track consumer browsing from site to site, have been strong supporters of regulations on ISPs, while resisting privacy regulations on themselves by arguing that this would severely reduce web content.

Last month, we conducted an online survey of readers and asked the following question: If you could improve one thing with the Internet today, what would it be?

1) Faster speeds – 15%
2) Lower prices, more options and tiers – 41%
3) More Internet competitors – 6%
4) Better reliability, security and privacy – 36%

5) More web content – 1%

6) None of the above – 1%

While the results are not scientific (305 responses), they provide some insights into the importance that consumers place on these policy positions. Two choices jump to the top — consumers want lower prices and better reliability, security and privacy. These results stress that Internet public policies must encourage network investment, stay away from policies that would raise prices for average and low-end online users, and avoid limitations on network management. Consumers do not consider having more web content or having more competitors as a priority. In summary, consumers do not have the same concerns as those calling for increased regulations of the Internet. Maybe it is time for policymakers to refocus on consumers.