Net Neutrality and the Laser-like Destruction of Jobs

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.