ACI Letter to the FCC Addresses Flawed Study Cited By Commenting Parties

February 10, 2010

Chairman Julius Genachowski
Commissioner Michael J. Copps
Commissioner Robert M. McDowell
Commissioner Mignon Clyburn
Commissioner Meredith Attwell Baker

Regarding GN Docket No. 09-191 and WC Docket No. 07-52

Dear Commissioners:

This letter and its attachment respond to recent comments filed by parties that cite a study by the S. Derek Turner of the Free Press titled “Finding the Bottom Line: the Truth about Network Neutrality & Investment,” a study that concludes, in part, that net neutrality regulation would encourage network investment. The Free Press study is seriously flawed in its analysis and is, in many places, at odds with generally accepted principles of economics, accounting, and corporate finance. Its conclusions, to the extent they rely on data, misconstrue linkages between causes and effects. Given the Commission’s laudable insistence that this proceeding be fact-based, comments by various parties that rely on this study as evidence that regulations would encourage investment should be carefully reviewed for their probative value.

Attached is Dr. Larry F. Darby’s analysis of the Free Press study. Dr. Darby is a former FCC Common Carrier Bureau Chief, Chief of its Economic Division, and now a Senior Fellow at the American Consumer Institute.

If you have any questions about the attached analysis, please feel free to contact either me or Dr. Darby directly.

Respectfully submitted,

Stephen Pociask
President
The American Consumer Institute
Center for Citizen Research
1701 Pennsylvania Avenue, NW
Washington, DC 20006

cc: Sharon Gillett
Jonathan Baker
Ruth Milkman
William T. Lake
Colin Crowell
Bruce Gottlieb
Priya Aiyar
Sherrese Smith
John Giusti
Jennifer Schneider
Renee Crittendon
Carol Simpson
Christine Kurth
Christi Shewman
William Freedman

 

  

ATTACHMENT (click here fp-crit-aci)

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