Internet Regulations Will Be A Job Killer

With unemployment above 9%, we can’t afford to do anything that will have a detrimental effect on the economy.  On the contrary, we should be looking to anything that will help spur job growth and see us through our current economic malaise.  Any regulation imposed by a government bureaucracy is going to have a detrimental effect on business and consumers, and thus a negative effect on the economy.  The FCC’s recent imposition of net neutrality rules (without the authorization of Congress) is one more way onerous government regulations are poised to choke off job creation.

Network neutrality (net neutrality) rules force Internet service providers to pass the costs of bandwidth-heavy services evenly to all consumers, rather than targeting the businesses that actually use the extra bandwidth.  The rules are borne from an unfounded fear that Internet service providers will first become illegal monopolies, and then start to use their power to throttle back competitor content.  With an increasingly robust broadband Internet market, the former is certainly not true; and with only one recorded instance of throttling (Comcast throttling back on illegal file-sharing) the later isn’t true either.  If it were true, consumers would simply change providers (from XFINITY to U-Verse, or from FiOS to HughesNet, or between any number of 4g providers, etc.).

There’s one obvious way to spur job growth, a way that many in Washington seem to be oblivious to—let investment in broadband infrastructure flourish.  A study released by New York Law School estimates that if broadband investment is allowed to continue under current rules, we could see at least $30 billion annually spent on broadband infrastructure alone, which would see the creation of over 500,000 jobs. With unemployment above 9%, we can’t afford to ignore numbers like that.  This investment is not only good for job seekers, but for other businesses and consumers who are more and more reliant on high-speed Internet in their business and personal lives.  Investing in this infrastructure allows the economy to grow.

But the net neutrality rules being imposed by the FCC is sure to be a job killer.  The rules would discourage companies from investing in broadband, because it takes away the incentive to keep producing.  The same study from NYU shows that when these rules go into effect, it could kill 502,000 jobs and a decrease in GDP of $62 billion per year.  This discouragement of investment hurts everyone—job providers, job seekers, and consumers who stand to benefit from improved service from the infrastructure expenditures.  We can also point to studies that show net neutrality rules will cause prices to go up for individual consumers, with one study showing that high speed Internet bills could increase by up to $55 per month for consumers.

So how do we see to it that we continue to encourage this investment?  By doing away with onerous FCC rules, for a start.  The House just recently passed H.J. Res. 37, which would disapprove the net neutrality rules being imposed by the FCC.  The resolution is currently awaiting a vote in the Senate.  Passing this resolution and sending it to the President’s desk for his signature would send a strong message that government is in the business of helping to create jobs, not kill them.  And, with the President’s signature, we could allow the fasting growing sector of our economy to pull us out of malaise.

 

Zack Christenson is a Chicago-based digital strategist who writes on tech policy.

 

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