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Net Neutrality and the Laser-like Destruction of Jobs

By: Neil Stevens (Diary)  |  February 5th, 2010 at 12:30 PM  | 

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What does Google-Free Press Net Neutrality plan mean for the American economy? We’ve already seen that American innovation would be harmed, but what about the politically all-important question of employment and the economy now?

Entropy Economics tackled that question and and the results aren’t pretty.

Net neutrality, down to the brass tacks, is an exercise in industrial policy. So for the sake of argument, would this policy help our economy? The FCC wants to pick winners and losers on the Internet. So with unemployment still hovering around 10% (even by the modern, downward-fudged figure), would Net Neutrality risk creation or destruction of jobs by favoring Internet firms over telecommunications firms?

Entropy Economics divides the relevant firms into two categories: “NN Supporters” such as Google, and “NN Skeptics” such as AT&T. It turns out that the Skeptics employ an order of magnitude more Americans than the supporters: 1.440 million to 0.148. Going further, Entropy even excludes the large last-mile telecom firms from the figure, and the opponents of Net Neutrality still employ almost four times as many Americans, 570k to 148k. If we’re going to favor the 148k job firms, we’re going to shed even more jobs in the Obama economy.

Net neutrality opponents also invest more in America. Entropy found that the opposing firms spent $189 billion in aggregate capital expenditures over the last three years, while the supporters again were an order of magnitude below, at $18 billion. The opponents not only hire more people but they build more of the resources that keep America competitive.

And of course, that capital investment has a ripple effect, creating jobs in construction, software, and other industries that also hire Americans. So Entropy concludes that “Washington’s current preoccupation with short-term job creation is just one more reason to oppose Net Neutrality,” and I conclude that as long as Barack Obama and the Democrats do not come out against the FCC’s Net Neutrality proposal, they’re not as focused on jobs as they claim.

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  • http://itsaboutfreedom.proboards.com Conservative Phantom

    …just which way is our benighted president going to come down on this issue?

    Hmmm….let me think….

  • fpete13527

    I’ve read the LONG list of comments in the prior posts on NN. I’m clear that many tech folks have concerns on both sides.

    Bottom line for me: No Net Neutrality.

    Also, if it’s between the Google argument and the ATT one…..I’ll take the ATT one….and I’m clear ATT are not angels.

  • http://www.hakubi.us/ Neil Stevens
  • musix

    An earlier article on this by Mr. Stevens showed his apparent lack of reporting the topics. This article continues along the failed school of thought. It is like reading an article from the turn of the 20th century. Something along the lines of ..” but buggy whip makers spend more money than car designers..”.

    Thinking outside the box, should you cable tv company tell you which channels you can watch at certain times? Should you phone company tell you which numbers you can or cannot call? Can you auto company tell you where you can drive your car? If not, then should you ISP be allowed to determine which internet sites you can visit?

    The questions that should be asked include, should you ISP read all of your internet traffic, including encrypted (banking) material? Should they offer that information to third parties? Should they block the traffic that does not suit them? If you think they should be required to do this, then opposing neutrality is the course to take.

    He is correct in one aspect. The FCC does want to pick winners. Hopefully, the consumer is the winner and not the telecommunications firms.

    Which jobs would be lost? Allowing the ISPs to block traffic would cause more jobs to be lost since web sites would have to shutter due to lost traffic. Internet access prices would increase due to less competition and having to pay for the traffic inspection hardware/software.

    This does not even touch the fallacy that this would work.

  • http://www.hakubi.us/ Neil Stevens

    That’s an odd thing to reference for a two day wonder.

    Who sent you?

  • http://hillbillypolitics.com Steph C

    When the FCC gets the power to pick winners and losers, small web hosters like me will lose out, too. I’ll wind up paying more for server leasing and maintenance. Considering my customers are small businesses with small site needs and/or personal websites/blogs, they’ll wind up paying more for the privilege.

    It’s the domino effect from what is dealt to internet service providers such as ATT, Comcast. and so on.

    How this guy can justify anything he said, I don’t know.

  • musix

    Unfortunately, RedState did not allow me to respond when I initially set up the account.

    I am not sent by anyone. I am a technical person who has followed the stories, articles, and cases involving ISPs and alleged copyright infringement. I even sent an email to your account.

    These particular articles piqued my interest. I have read this site for some time and wanted to offer a alternate view to these ideas.

    There is a lot of misinformation about computers and networking in general. Blaming freeloaders is easier than discussing deep packet inspection, poor business models, throttling, international boundaries, etc.

    In a recent case of throttling, an ISP was caught creating fake RESET packets to have a connection dropped. If a hacker did this, it would be called a denial of service. The ISP called it traffic shaping. This is the sort of activity that NN wants to stop. Today the target is BitTorrent, next week it could be web sites.

  • musix

    I do agree that NN should not be pushed through the FCC. We have too many regulations as it is.

  • http://www.hakubi.us/ Neil Stevens
  • jdkchem

    From the mouth of AT&T came the infamous statement about “freeloaders” paying “their fair share”. Funny but I thought I was paying the market rate for a service. Now because of the greed of a few they’re going to restrict access.
    You’re on the wrong side. Having Comcast, AT&T, Qwest and others pick winners and losers is just as damaging as having the FCC do the same. Should Comcast be allowed to drive up the cost of Vonage their competitor in VOIP? I’m already paying for internet service why should I not be allowed to use that service as I see fit?
    All I’ve seen out of NN is a good idea get hijacked by corporate cronies looking to use congress to pad their wallets.

  • http://www.hakubi.us/ Neil Stevens

    Net Neutrality as written by the FCC has nothing to dow ith that.

    It’s a pure power grab.

  • Scope

    Reading an article at American Thinker- The FBI now wants to know where you’ve been on the net-

    http://www.americanthinker.com/blog/2010/02/fbi_wants_to_know_where_youve.html

    In the comments section, someone suggested “Startpage” as an alternate browser, that does not track your info.

    http://startpage.com/eng/protect-privacy.html

  • http://www.hakubi.us/ Neil Stevens

    And if the FBI got what it’s asking for, which just sounds too ridiculous even to consider, it wouldn’t help.

  • Richard Mullins

    I decided to bookmark it in FF so when I want to search, I’ll have no problem when I want to search things. Looks good to me although I haven’t used it yet.

  • mschmitt

    There are literally dozens of “web-browsers” that wrap Internet Explorer and provide “extra services” (like steal your info). A quick web search shows lots of hits like “How do I remove the Startpage Trojan”, so I’d probably shy away if I were you.

    \geeksnark
    Anyway, I’ve never understood why anyone needs more than wget|awk to use the internet. Honestly, if you didn’t know it existed before, it’s not worth finding out about.

  • Scope

    Good info to know.