Special Reports The Internet Ecosystem: Employment Impacts of National Broadband Policy

This study addresses some unexplored investment and job impact implications of new Net Neutrality regulations recently proposed by the Federal Communications Commission. The rationale for doing so has consistently been cast in terms of maintaining open networks, preserving end-to-end principles, ensuring neutrality, and other equally vague and essentially irrebuttable objectives. In context of a weak economy and bleak jobs outlook, the widely recognized, but limited, ability of monetary and fiscal policies to create jobs, and the increasing economic and political costs of citizens without jobs, this study suggests a third path – regulatory forbearance toward broadband networks – as a means of stimulating investment and job creation. The study concludes:

• By eliminating business options successfully practiced by proponents of more regulation, the Commission’s proposals would dramatically increase market risk, lower expected growth, suppress network investment, and dampen opportunities for network providers to maintain and create jobs.

• The proposed change from Ex Post to Ex Ante regulation would create lengthy regulatory delays and increase regulatory risk for investors, while dampening prospects for new job creation in the Internet sector and in others it supports.

• These and other threats to investment incentives and job creation opportunities are out of line with both the emerging national broadband policy and the growing imperative to create more good, permanent jobs.

• Historical data suggest that for every $1 billion in revenue, “core” network companies provided 2,329 jobs, while non-network “edge” companies provided 1,199 (about half as many). This indicates that Net Neutrality rules that reduce revenues and growth for network companies, and transfer benefits (revenue or growth prospects) to non-network companies, are a barrier to job creation.

• In short, these regulations will shift risk, returns, growth and opportunity away from “core” network providers and in favor of “edge” applications and content providers. SEC data show that, historically, “core” companies earn at lower rates, invest more and create more jobs per dollar of value received in the market than do “edge” companies. Regulation that shifts value away from network providers to non-network providers will reduce investment in network infrastructure and citizen access to broadband while dampening creation and preservation of jobs. This conflicts with consensus requirements of a National Broadband Policy and with our macroeconomic policy goals.
In support of these conclusions, the study sets out financial and economic principles linking Net Neutrality style regulations, investment and jobs; it presents data (filed by firms with the Securities and Exchange Commission) depicting the record of broadband network providers and selected applications providers; and it projects those relationships into the future as guides to the potential responses of firms in the Internet Ecosystem to Net Neutrality type regulatory interventions.

Read more: Jobs_Study_Final_.pdf

Special Reports IIA’s NOI Reply to FCC

Dear Chairman Genachowski, Commissioners Copps and McDowell and Mr. Levin: The Internet Innovation Alliance (IIA) would like to thank you for considering our earlier comments regarding the development of a National Broadband Strategy, and for this opportunity to provide additional feedback. First and foremost, we wanted to direct your attention to a study recently released by Compass Lexecon economist Jon Orszag, Mark Dutz and Bobby Willig (Orszag Report) and commissioned by the IIA. A copy of their report will be submitted as an ex parte filing in Docket No. 09-51. The Orszag Report’s findings and several comments supplied by others compels us to offer these additional observations.

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Read more: 72109_IIA_NOI_Submission_FINAL.pdf

Opinion Editorials The Conservative Case for Broadband

In the wake of November’s elections, following extensive growth in federal spending and compounded by the partial nationalization of our financial sector, many conservatives are in retreat. Fearing a new New Deal of liberal lawmaking, conservative stalwarts are girding for years in the policy wilderness. Yet all is not lost.

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Special Reports Transforming the Fight Against Poverty: The Internet & Anti-Poverty Strategies

Ever since the beginning of the Internet revolution, people have spoken of the “digital divide” between the Internet “haves” and “have-nots.” While access toinformation technology is still a compelling part of any anti-poverty strategy here in the U.S. and in much of the world, decreasing information technology costs have broadened access to previously underserved populations both here and in many…

Read more: 11-10-08KamarckPaper-FINAL.pdf

Special Reports National Leaders Must Tap Internet To Fight Poverty In The U.S.

Taking Government Run Programs Online Can Save Billions and Multiply Number Aided Shows New Paper from Harvard Professor Elaine C. Kamarck, PhD WASHINGTON, D.C. – November 11, 2008 – The Internet will be the catalyst for advancement of programs promoting social justice over the next decade, according to new research from Harvard Professor Elaine…

Read more: 1110_08KamarckExecutiveSummary_.pdf

Opinion Editorials Wanted: A National Broadband Policy

The goal must be universal, high-speed Web access, and governments—both federal and state—have crucial roles to play ...

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Special Reports Home Broadband Adoption 2008

The Pew Internet Project released their latest study “Home Broadband Adoption 2008.” Among the key finding were:
In the spring of 2007, 47% of Americans had broadband at home.
In the past year, there has been no growth in home broadband adoption among low-income Americans.
Broadband users are starting to pay more if they want more speed; 29% of home broadband users say they pay extra for a premium service that offers more speed.

The full study is available at http://www.pewinternet.org.

Read more: PIP_Broadband_2008.pdf

Special Reports The Broadband Efficiency Index: What Really Drives Broadband Adoption Across the OECD?

A new analysis by the Phoenix Center shows that the United States is adopting broadband technology at the same pace as most other industrialized countries, once demographic and economic differences are taken into account.

Read more: PCPP33Final.pdf

Special Reports Deployment of Broadband to Rural America

An Evaluation of Current Broadband Services To Rural Americans and The Impact of Internet Public Policy On Broadband Deployment.

Read more: USIIA.pdf

Special Reports The Economic Impact of Stimulating Broadband Nationally

“The Economic Impact of Stimulating Broadband Nationally” details the potential state-by-state impact of legislation to accelerate broadband access and use. The report’s findings suggest that the U.S. could realize an economic impact of $134 billion annually by accelerating broadband availability and use across all states. The map above shows the potential for broadband that exists in every U.S…

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