Last week, Will
Rinehart released a report entitled “Title II
Reclassification Negatively Impacts Jobs and Investment.” This report
provides additional evidence regarding the impact of Title II regulations on
employment to a Perspectives from FSF
Scholars that I wrote in December 2014 entitled “Title II Would
Not Just Harm Consumers, It Would Harm Workers Too.”
Rinehart used
investment data from a paper by Kevin Hassett and Robert Shapiro entitled “The Impact of Title II Regulation of Internet Providers On
Their Capital Investments,” which I blogged about here.
Among many of the Hassett and Shapiro’s findings, one was that Title II
regulations would decrease investment by $11.8 billion in 2019, the final year
of their estimation. Using a multiplier provided by the Bureau of Economic
Analysis, Rinehart calculated that an investment decline of $11.8 billion in
2019 would result in 174,233 fewer jobs than what would exist if Title II
regulations were not adopted. Rinehart also made the following clarification:
Since
the US has an extremely dynamic labor market and due to the very nature of
multipliers, investment could shift toward other industries, so this number
applies only to broadband employment. However, the forgone investment would
also come at the expense of highly technical careers, which would ultimately
limit positive spillovers like new companies in these evolving markets.
As
I mentioned in a blog in early January, the increased fees that would be required
from Title II regulations should depress investment by more than the amount Hassett
and Shapiro projected, because as the price of broadband increases, the amount
consumers demand decreases. This would disincentivize Internet Service
Providers from investing and could ultimately lead to even more jobs lost, and/or
jobs displaced into other areas of the economy.
The
following quote from “Title II Would
Not Just Harm Consumers, It Would Harm Workers Too” sums up how
the FCC regulators and elected officials should approach Title II:
If
a regulation (that does not correct for a market failure) affects employment
and wage levels in the market (whether up or down), the impact should be seen
as a negative effect on the economy. If these shifts in the labor market were a
positive market outcome, they would have occurred absent the regulation.
“Jobs!”
should not be a mere political slogan. Public officials, including regulators,
should focus on the impact of regulations on employment. Any public official
who says he or she wants a healthy labor market should be against Title II
reclassification because such regulations likely would have serious negative
impacts on many workers.
Job
reallocation is not a positive impact of regulations and this report by Will
Rinehart provides further evidence to the negative impacts of Title II
regulations on investment and employment.
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