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Study: Net neutrality rules would cost telecom jobs

The broadband industry would lose 340,000 jobs over the next 10 years, the study says

By , IDG News Service
April 23, 2010 05:11 PM ET

IDG News Service - Network neutrality rules adopted by the U.S. Federal Communications Commission could lead to the loss of more than 340,000 jobs in the broadband industry over the next 10 years, with few offsetting Web content jobs, according to a new study funded by a group opposed to the proposed rules.

If the FCC adopts the net neutrality rules it is now considering, close to 1.5 million jobs across the U.S. economy could be put in jeopardy by 2020, and revenue growth in the broadband industry would slow by about one-sixth during that time frame, said the study, by Coleman Bazelon, a telecom economist with The Brattle Group.

Bazelon predicted that spending in the broadband industry would decrease by US$5 billion in 2011 if the FCC passes formal net neutrality rules, with the number growing in subsequent years.

"The FCC should be careful in developing any net neutrality rules, to not undermine its own goals of promoting broadband and employment," Bazelon said during a press conference Friday.

Broadband deployment in the U.S. is a "success story," the study said. About 95 percent of U.S. residents have fixed broadband available, and 98 percent have 3G mobile broadband available, the study said.

"Any change in the rules affecting broadband should be well-considered so as not to harm its future development," the study added.

The study is the latest of several weighing in on the economic impact of net neutrality rules, which are now being considered by the FCC. A study released in January by the Institute for Policy Integrity at the New York University School of Law suggested net neutrality rules would preserve the investments of Web content producers such as newspapers and bloggers. Just this Thursday, the Phoenix Center for Advanced Legal and Economic Public Policy Studies, a free-market think tank, released several studies questioning the economic benefits of net neutrality rules.

The mobile broadband industry would be hit particularly hard by net neutrality rules, said the new Brattle study, funded by the Mobile Future, a Washington, D.C., group advocating for pro-business mobile issues.

"Wireless would be disproportionately impacted, because it represents the majority of [broadband] growth over the next decade," Bazelon said.

The study also suggested that any Web content jobs that might be created with strong net neutrality rules wouldn't offset the losses in the broadband sector. Content jobs cost more to create than broadband jobs, meaning a direct transfer of profits from broadband to content would be a "net job loser," Bazelon said.

"Different content might be better under a net neutrality regulatory regime, but there's no theoretical reason to believe there will be more content or more valued content," Bazelon said. "The losses in the broadband sector are large, creating a large hurdle that the content sector would have to overcome."

Net neutrality advocates questioned the Mobile Future study's results.

One of the major backers of Mobile Future is broadband provider AT&T, one of the most vocal opponents of net neutrality rules, said Andrew Jay Schwartzman, senior vice president and policy director of the Media Access Project, a media reform advocacy group.

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