Four ISPs Are Among 2016 Investment Heroes

Today, the Progressive Policy Institute published "Investment Heroes 2016: Fighting Short-termism" by Michelle Di Ionno and Michael Mandel. Four of the investment heroes, the top 25 companies in terms of capital expenditures invested in the United States, are Internet service providers, including AT&T (ranked #1), Verizon (#2), Comcast (#8), and Time Warner Cable (#21). Although there is evidence that broadband providers have slowed their investments since the FCC adopted its Open Internet Order, these four companies invested over $40 billion in 2015, representing 23% of the all the investment heroes combined. 

A Look at Set-Top Box Prices Shows No Monopoly Power

In a Forbes article, on February 15, 2016, Progressive Policy Institute Economist Hal Singer debunks the FCC’s theory that the market for set-top boxes is a monopoly. He says that small providers with few market shares often charge more for set-top box rentals than large providers with many market shares. For example, TiVo charges between $299.99 and $599.99 upfront for a DVR and 1 year of service, but Comcast charges only $9.99 a month for a DVR. Mr. Singer says that the realities of the marketplace are the opposite of the FCC’s theory because monopoly prices should increase with market power, not decrease.

Licensed Spectrum Enables the App Economy and Create Jobs

On January 25, 2016, the Progressive Policy Institute published a report entitled “App Economy in Europe (Part 1).” Michael Mandel writes that the app economy in Europe comprises 1.64 million jobs with the United Kingdom (321,200 jobs) and Germany (267,900 jobs) leading the way. The report also states that the app economy in the Unites States comprises 1.66 million jobs and that the U.S. has a higher “app intensity” (app economy jobs as percentage of all jobs) than Europe with 1.2 percent and 0.7 percent, respectively.

Today, January 26, 2016, CTIA – The Wireless Association and Recon Analytics released a new report entitled “The Impact of 10 MHz of Licensed Spectrum,” which finds that the average impact of an allocation of 10 MHz of licensed spectrum from 2011-2014 was the creation of an additional 1.6 million jobs and $24.3 billion in economic activity. The report also finds that in 2014 the U.S. wireless industry contained 7.03 million jobs and created $194.8 billion in annual economic activity.

With the app economy included, the use of licensed spectrum has (directly or indirectly) created over 8.6 million jobs in the U.S. economy. As I wrote in a November 2015 blog, it is important that Congress remove regulatory barriers that stifle the growth of mobile broadband and reallocate licensed spectrum. This would benefit consumers – by incentivizing more investment in mobile services – and benefit workers – by creating more jobs in the mobile services sector and app economy.