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FCC Broadband Reclassification, What it Means to You


Posted by Robert Woodsum on Wednesday, May 26th, 2010, 9:25 AM PERMALINK


Stratecast, a group of experts focused on market strategy and analysis, takes aim at just how wonderful net neutrality would be in a new detailed report.  Instead of reading through the 26 page report, I'll discuss the finer points in plain detail.  The majority of the report discusses net neutrality's impact on the economy as a whole and on the individual consumer.  First off, Stratecast estimates that service providers will experience $7 billion in annual overhead costs.  Also, it is expected that operating costs will increase by $20 billion.  These extra costs need to be accounted for, which in turn, are picked up by the consumer.  Doing so could impose anywhere from $10 more added monthly to your internet bill, all the way up to $55 in extra fees. 

Another way of looking at the $7 billion in overhead costs is its affects on job growth.  There are approximately 1.1 to 1.4 million service provider jobs.  After that, it is determined that there are 1.54 jobs dependent on every 1 service provider job, translating to approximately 2.8 to 3.7 million jobs.  That $7 billion in overhead, however, creates an impact of about 70,000 jobs lost, a blow the job market doesn't need.  Oh, and don't forget about the FCC's plan to build out broadband, costing $350 billion over the next several years.

Net neutrality can also affect service provider's revenue.  You may think that this won't affect the consumer, but it actually does.  When providers generate less revenue, there are fewer resources that can be reinvested into research and development.  Thus, there will be less innovation, fewer updates, and slower advances in technology.  Basically, you'd go from paying what you do now, receiving the services you want, to paying upwards of $55 more monthly for subpar services, all while seeing the job market drop even more than it already has.  Overall, net neutrality has a negative economic affect on the consumer, something that no one needs.

To read the entire Stratecast report, click here.

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