It doesn’t take a great deal of prescience to guess Republicans will gain the majority advantage in the FCC as the new GOP administration takes over. There’s been a huge amount of conjecture splashed all over the web by analysts and journalists about what that could mean to the regulations Chairman Tom Wheeler spearheaded during his tenure, with much of that chatter suggesting a hunk of it might change. The names floating in the press as potential replacements for Wheeler as chair tend to back up those ideas, which you can read more about here in Wireless Week.
“If the rhetoric of those surrounding Trump’s campaign rings true, we can expect a Republican FCC to make a big push to roll back some of the regulations put in place under President Obama such as the Title II/Net Neutrality rules,” Wells Fargo Senior Analyst Jennifer Fritzsche wrote in an early November note. “There may also be a push to roll back some or all of what the FCC just did on privacy. It’s unclear whether Chairman Wheeler will be able to act on the open items related to Business Data Services or set-top box reform before he departs and if he does not, some suggest a Republican FCC will reverse course on these two items.”
An example of a group that would welcome regulatory rollbacks and a lighter touch from the FCC in general is the American Consumer Institute, which released a report this week. Its study says that broadband network companies create 4,200 more jobs than large web-based providers for every billion dollars in revenue “but this added job creation is being threatened by onerous regulations.”
“We’re witnessing a crippling wave of overregulation in the U.S. telecommunications industry that is resulting in economic consequences that impede private investments and job creation, and at the end of the day the only losers are American consumers,” Steve Pociask, president of the American Consumer Institute, says. “Under this new administration, policymakers, and regulators must put aside partisan agendas and work together to deliver practical broadband policies that level the competitive playing field and support our nation’s economy and encourages innovation.”
The American Consumer Institute suggests that federal regulations dramatically increase operating costs for ISPs (which the study refers to as core providers), as well as “increase market risk, lower expected growth, suppress network investment, and dampen opportunities for network providers to maintain and create jobs.” The institute also maintains that regs overlook large web-based applications providers (edge providers).
The study says that for every billion dollars in revenue, core providers create 812 more direct jobs or about twice as many as compared to edge providers, or 4,200 jobs when including industry multiplier effects. Additionally, it suggests that core providers earn profits at lower rates and invest more back into the economy per dollar of value received in the market. The institute concludes that regs tend to reduce revenue and growth for core companies and actually transfer revenue or growth prospects to edge companies.
“The time has come to reform and, in some cases, altogether eliminate onerous broadband regulations that stifle our nation’s economic potential,” Pociask says. “We hope the incoming administration and 115th Congress recognize the urgency of this situation and focus on the economy and consumers, because doing so will ensure our future success as a nation for decades.”
Filed Under: Industry regulations