Last week before a room of Net Neutrality skeptics at The Cable Show, the FCC’s chief of policy analysis, Paul de Sa, claimed that the Commission factored in possible market reactions to their plan to reclassify and regulate the Internet.  If that’s true, they either didn’t pay attention to the results or didn’t care.

The FCC and proponents of Net Neutrality have long argued that their regulatory goals will not impede the ability for telecom companies to continue expanding and investing in broadband Internet (which they alone have built out to over 95% of American households).  In their comments supporting Net Neutrality, the socialist organization Free Press stated flatly that “Network Neutrality will not deter ISP investment.”

So, for the folks who have never heard of the “private sector,” I’ll start by explaining that publicly traded companies raise money to expand their business by selling “stocks” to investors.  For Internet service providers, when those stocks go up, it means more money to be reinvested in building out networks and speeding up service.  When stocks go down, it means less.

As the Wall Street Journal first pointed out, since the FCC’s announcement on May 6 that it will toss the Internet under a 1930s regulatory regime in order to enact Net Neutrality, the number of people wanting to invest in our Internet infrastructure has fallen sharply.  Here’s a brief rundown of how well some ISP stocks have performed between the day before the FCC announcement and right now:

• Comcast: down 9.08%
• Cablevision: down 9.25%
• Time Warner Cable: down 5.15%
• AT&T: up 0.21%
• Verizon: down 0.14%

How these numbers jive with FCC Chairman Genachowski’s ambitious National Broadband Plan to expand more Internet access and adoption, I’m not sure.  But I doubt they’ve done a real market analysis for that either.

UPDATE: Our friends at the Phoenix Center have a couple terrific quantitative pieces that dismantle the above arguments made by Free Press.  The first breaks down statements by Free Press that Net Neutrality won't impact infrastructure investment by service providers.  The second paper takes aim at Free Press's argument that service providers walk away with substantial profits and don't reinvest that money into better service and products.