Consumer Costs for Broadband Access Could Increase by as Much as $55 Per Month; Net Neutrality Regulations Are Likely to Trigger Job Losses
WASHINGTON – The Internet Innovation Alliance (IIA), a broad-based coalition supporting broadband availability and access for all Americans, released the following comments from Co-Chairmen Bruce Mehlman and David Sutphen on a new Frost & Sullivan study that suggests that net neutrality regulations under consideration in Washington would likely hinder the goal of universal broadband access, impose increased costs on consumers and result in significant job losses.
According to Frost & Sullivan Program Manager Mike Jude, Ph.D., net neutrality regulations would heighten uncertainty and risk in the business case for expanding broadband infrastructure, which could significantly discourage investment among network operators. If investment is maintained in an environment constrained by net neutrality regulations, the Frost & Sullivan model indicates that costs are “ultimately borne by the consumer” when the opportunity for network operators to generate service revenue is curtailed.
“It’s worth noting that Jude’s research predicts that faced with net neutrality regulations, network operators would likely turn to ‘access charges to support network deployment and management,’” commented Sutphen. “At a time when government should be promoting access and adoption, it is counterproductive to pursue policies that could inhibit these important goals and exacerbate the digital divide.”
“This is the latest in a series of analyses suggesting that significant new regulation of the Internet could have a very detrimental impact on broadband investment, consumer adoption and economic recovery at this time,” said Mehlman. “As the Washington Post and countless others correctly observed, the free and open Internet is not currently at risk, and certainly does not need regulatory rescue right now.”
Key findings from the study, “Net Neutrality: Impact on Carrier Investment and Economic Growth,” include:
“Net neutrality could impose anywhere from $10 to as much as $55 each month on top of an average broadband access charge of $30.” According to Jude: “To the extent that consumers were unwilling or unable to incur such costs, net neutrality could, ironically, have the effect of actually reducing broadband penetration.”
Even assuming a “best case scenario, with minimal regulatory impact, net neutrality could still impose a seven billion dollar a year overhead on the economy by 2011,” with a commensurate loss of 70,000 jobs.
“In its recent NPRM Reply Comments, the NAACP noted that there are no ‘indications or evidence that such [net neutrality] rules would help spur [broadband] access.’ The Jude study, however, is another example in a growing body of work that points to the fact that these regulations could risk doing the opposite – namely deter access,” said Sutphen.
Concluded Mehlman, “Frost & Sullivan should raise a major red flag for the excellent broadband team at the Federal Communications Commission. Rather than getting distracted by divisive new regulations with significant economic risks to consumers, the Commission should drive full speed ahead on those aspects of its Plan more surely focused on broadband adoption and deployment.”
Frost & Sullivan reports are limited publications and available to the firm’s client base. To read the research, visit http://internetinnovation.org/library/special-reports, where the report has been reprinted with the permission of Frost & Sullivan. To read Frost & Sullivan’s release on this study, visit http://tiny.cc/7s3vk.
About The Internet Innovation Alliance
The Internet Innovation Alliance is a broad-based coalition of business and non-profit organizations that aim to ensure every American, regardless of race, income or geography, has access to the critical tool that is broadband Internet. The IIA seeks to promote public policies that support equal opportunity for universal broadband availability and adoption so that everyone, everywhere can seize the benefits of the Internet – from education to health care, employment to community building, civic engagement and beyond.
