Propaganda Masquerading As Academic Net Neutrality 'Jobs' Loss Assessment

from the don't-make-me-laugh dept

slacker525600 was the first of a whole bunch of you pointing us to Ars Technica's writeup up of a so-called "study" of potential job losses from the FCC's decision to reclassify broadband. The writeup is done by Matthew Lasar, who's usually pretty good to cut through ridiculous claims, but doesn't seem to challenge this one at all. The report is officially from New York Law School's Advanced Communications Law & Policy Institute, but it was written by Bret Swanson. Remember him? He's a well known propagandist for the telco industry. He's not a "researcher." He's the guy who coined the concept of the "exaflood" and when that was totally debunked, renamed it the "exacloud." He's been AT&T's go to guy for pure anti-net neutrality propaganda, and he seems to relish in totally making stuff up.

A few months back, he made some similar news by claiming numbers for "job losses" if net neutrality were legislated, but his methodology wasn't just suspect, it was stupid. He literally looked at the number of people employed by companies who filed anti-net neutrality filings with the FCC and compared it to the number of people employed by companies who filed pro-net neutrality filings with the FCC. I'm not joking;

To gauge the possible fallout of new Net Neutrality regulation, we looked at what Internet industry companies were saying. The FCC received an astonishing 100,000 individual comments on its Net Neutrality proposal and some 15,000 official filings from companies, trade associations, academics, and think tanks. Excluding the associations, academics, and individuals, we analyzed the company comments and discerned support for or opposition to Net Neutrality. We then tabulated the number of workers employed by these Supporters and Skeptics and found a huge disparity.

Net Neutrality Supporters directly employ 148,936 workers. But Net Neutrality Skeptics employ 1,440,021, almost 10 times as many.

So, just knowing the report was written by him pretty much tosses all credibility out the window. However, we can hope and pray that perhaps he's changed and actually has done some real research. Let's look at the actual report (pdf).

It starts off with a nice whopper of an assumption:

Indeed, many estimate that, in the absence of the FCC's network neutrality proposals, investment and job growth will continue apace across the sector. This paper supports estimates that broadband service providers will commit at least $30 billion annually in capital expenditures on broadband alone between 2010 and 2015, resulting in the creation or sustainment of 509,000 jobs.

Bad assumption, Bret. First of all, there hasn't been a "light regulatory regime." There's been a very heavy one: involving all sorts of subsidies to the telcos and efforts to keep competitors out of the market. And, because of that lack of competition, the big telcos Verizon and AT&T have already slowed their investment, and it happened well before any attempt by the FCC to reclassify broadband. They slowed it because they're not facing any serious competition in many regions, so there's little reason to upgrade the network. Oh, and as for that claim about how this would create or sustain 500,000 new jobs. Tell that to folks the telcos are laying off.

Conversely, decreased investments by broadband service providers will hinder capital expenditures by others in the ecosystem, particularly those at the edge. The analyses in this paper indicate that the imposition of network neutrality rules could have devastating impacts across the ecosystem between 2010 and 2015.

Actually, it appears the lack of competition, driven in part by propaganda from the likes of Swanson, has already created that "devastating" situation, with the telcos cutting back their investment, since they don't have to worry about losing customers.

Okay, so here's the fun section:

• A 10 percent decrease in investment by wireline and wireless broadband service providers, coupled with likely spillover effects, could result in the loss of 502,000 jobs across the entire ecosystem and would have a negative impact on U.S. GDP on the order of approximately $62 billion per year.
• A 20 percent decrease in investment by wireline and wireless broadband service providers, coupled with likely spillover effects, could result in the loss of 553,000 jobs across the entire ecosystem and nearly $72 billion in GDP losses per year.
• A 30 percent decrease in investment by wireline and wireless broadband service providers, coupled with likely spillover effects, could result in the loss of 604,000 jobs across the entire ecosystem and over $80 billion in GDP losses per year.
• Because the FCC's network neutrality proposals could foreclose even larger investments than presumed in the paper's baseline scenario, the number of jobs lost or foregone in the ecosystem could be even greater, stretching toward 700,000.

Remember, the telcos have already been cutting back their investment and it has absolutely nothing to do with net neutrality, but with the fact that they don't need to invest as much in certain areas because there's no serious competition in those areas. They did spend a lot on upgrades in competitive markets, even though there was all of the "uncertainty" around net neutrality that remains today.

Also, notice the language choices in the numbers above, specifically 'likely spillover effects." This is a favorite trick of industry propagandists looking to make "loss" numbers look good. These "spillover effects" are what we usually call ripple effects. They're a form of double, triple or quadruple counting the same "losses" as they ripple through the economy. And, they only look at the ripple going in one direction.

So, for example, Swanson and others friends of AT&T and Verizon like to claim that net neutrality will cause them to cut back on investment due to "uncertainty." But, if that were actually true (and I don't for a second believe it is), then wouldn't it also mean that this new "certainty" in a free and open internet that can't have certain services discriminated against or double charged, will also feel a lot more free to invest themselves? I can't see how Swanson can argue that the impact only goes in one direction, and totally ignore the economic impacts in the other direction.

Oh, and "uncertainty" is really just a code word for "competition" of course, which most of us in the capitalist world tend to think of as a good thing for innovation.

Then you look at the actual methodology for how Bret calculates his numbers of job losses, and it's hard not to hold back serious laughter. He takes wild guesses about massive potential job growth based on absolutely nothing, and then similarly takes a wild guess on what the job growth would be if the telcos didn't invest as much as in his already ridiculous extrapolation. And he blames it all on net neutrality. In other words, it's a made up number, derived from a made up number, built off of a laughable premise, ignoring the reality of what's happening today.

Filed Under: bret swanson, fcc, job losses, net neutrality