Press Release
Free Press: Industry-Funded Study on Net Neutrality and Jobs 'Deeply Flawed'
Contact: Timothy Karr, 201-533-8838
WASHINGTON -- Free Press responded to the findings of an industry-funded “study” conducted by Coleman Bazelon and paid for by the Mobile Future, a coalition which includes AT&T, various chambers of commerce, and other opponents of de facto Network Neutrality rules.
S. Derek Turner, Free Press research director, issued the following statement:
“This industry-funded research is based on deeply flawed assumptions. The Mobile Future study's central premise that Network Neutrality rules would lower broadband industry revenues by one-sixth over the next decade incorrectly extrapolates from the past impacts of telephone regulations on DSL growth, and erroneously assumes that light-touch Network Neutrality rules would have the same overstated impact. The study also completely ignores the practical reality that we have for years, and are now, living in a world of defacto-Net Neutrality, and that revenues are soaring. AT&T was put under a strict Network Neutrality regime as a result of its merger with Bell South, and its revenues saw healthy growth during that time.
“Some opponents of Network Neutrality charge that this light-touch regulatory regime will somehow result in ISPs reducing their work force. The reasoning behind this argument, these opponents say, is that Network Neutrality will reduce investment, causing ISPs to hire less and fire more. This assertion is plainly unsupported by the facts, and actually contradicts what unfortunately has become the ISP industry’s default behavior, as was demonstrated by Verizon yesterday: In this consolidated industry, as revenues rise, jobs are cut.
“Since 1996, AT&T, Qwest and Verizon have collectively seen a 32 percent increase in revenues, while jobs have dropped 25 percent. This pattern of ISPs destroying good jobs while reaping higher profits will likely continue with or without the existence of Network Neutrality rules.
“With Network Neutrality, content innovation will prosper, furthering demand for high-capacity, ubiquitous Internet access, which in turn will stimulate ISP investment and increase the need for more jobs. But without Network Neutrality, ISPs will have an incentive to reduce network investment and jobs, in order to create artificial scarcity and make congestion the norm.”
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S. Derek Turner, Free Press research director, issued the following statement:
“This industry-funded research is based on deeply flawed assumptions. The Mobile Future study's central premise that Network Neutrality rules would lower broadband industry revenues by one-sixth over the next decade incorrectly extrapolates from the past impacts of telephone regulations on DSL growth, and erroneously assumes that light-touch Network Neutrality rules would have the same overstated impact. The study also completely ignores the practical reality that we have for years, and are now, living in a world of defacto-Net Neutrality, and that revenues are soaring. AT&T was put under a strict Network Neutrality regime as a result of its merger with Bell South, and its revenues saw healthy growth during that time.
“Some opponents of Network Neutrality charge that this light-touch regulatory regime will somehow result in ISPs reducing their work force. The reasoning behind this argument, these opponents say, is that Network Neutrality will reduce investment, causing ISPs to hire less and fire more. This assertion is plainly unsupported by the facts, and actually contradicts what unfortunately has become the ISP industry’s default behavior, as was demonstrated by Verizon yesterday: In this consolidated industry, as revenues rise, jobs are cut.
“Since 1996, AT&T, Qwest and Verizon have collectively seen a 32 percent increase in revenues, while jobs have dropped 25 percent. This pattern of ISPs destroying good jobs while reaping higher profits will likely continue with or without the existence of Network Neutrality rules.
“With Network Neutrality, content innovation will prosper, furthering demand for high-capacity, ubiquitous Internet access, which in turn will stimulate ISP investment and increase the need for more jobs. But without Network Neutrality, ISPs will have an incentive to reduce network investment and jobs, in order to create artificial scarcity and make congestion the norm.”
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