A New York Law School study released this month warns that tinkering with the broadband regulatory regime could spell the loss of hundreds of thousands of jobs and reduce GDP by $80 billion.
The study, authored by Charles Davidson and Bret Swanson, forecasts that the nation would hemorrhage 500,000 jobs in a best-case scenario were broadband reclassified as a Title II telecommunications service. That just so happens to be an objective currently under pursuit by members of the Federal Communications Commission (FCC) with support from backers of “net neutrality” policy.
The forecasted job losses are likely to make for unpleasant headlines for the FCC at a time when jobs and the economy remain paramount in the minds of most voters and legislators.
“Especially at time when the national economy is attempting to recover from a major and enduring downturn and private sector job creation remains a concern, the destabilizing impacts of the FCC’s proposals place the nation’s economy at even greater risk,” the study reads.
Telecommunications companies have for months now warned that a formal adoption of the FCC’s reclassification proposal could hamper innovation and infrastructure investment, and observers say this study could provide them with fresh ammunition in the fight against reclassification and net neutrality.
“If this Title II regulation looks imminent, we have to re-evaluate whether we put shovels int he ground,” AT&T chief executive Randall Stephenson said earlier this month in an interview with the Wall Street Journal.
From 2003 to 2009, broadband service providers invested, on average, an annual $30 billion for deployment, which created or sustained some 431,000 jobs. Were that level of investment to dip by a conservative 10 percent in the wake of reclassification, 502,000 jobs would disappear and the nation’s GDP would shrink $62 billion. At 30 percent, the study projects the U.S. GDP would drop by $80 billion, for a loss of 602,000 jobs.
Following suit of their Republican colleagues, a growing chorus of senior Democrats have in recent weeks expressed opposition to the FCC’s regulatory rewrite, asking they instead pursue a legislative solution. Cross-chamber whip counts reveal at least 285 legislators disapprove of the measure.
“Despite these calls and mounting evidence of the likely negative economic consequences of its actions, the FCC marches on undeterred,” the study’s two authors wrote in an editorial Tuesday for The Hill newspaper. “With the economy still in a vulnerable state, all efforts should be focused laser-like on spurring private sector job creation. The FCC’s proposed regulations do not further this agenda and should be ditched lest the best intentions of unelected regulators block a robust economic expansion.”
Critics of the FCC charge that the agency has paid too little attention to such claims, but say they hope this study may garner additional focus from figures such as FCC Chairman Julius Genachowski as well as administration officials.
“With jobs and the economy being the number one issue right now, they really can’t afford to ignore studies like this one,” opined one tech policy expert scrutinizing the FCC’s maneuvering.
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