New study: stronger net neutrality laws are a tax on Internet use

The leftist Washington Post reports on a new study which counts the cost of the Obama administration’s proposed “net neutrality” policies.

Excerpt:

[A] new study suggests that strong controls on Internet providers might force Americans to pay more for their Internet, anyway.

Internet service providers would be subject to more than $15 billion a year in new fees if the Federal Communications Commission decides to start regulating them with Title II of the Communications Act — the same tool the agency uses to police telephone service, according to Hal Singer and Robert Litan, two economists who support less-aggressive net neutrality rules. And those charges, they say, would inevitably be passed along to you.

Regulating broadband under Title II would allow federal, state and local governments to collect the same fees from ISPs that they already levy on phone companies. Among these are a “universal service” fee that was established decades ago to help ensure everyone in the country had access to telephone service.

In a paper published by the Progressive Policy Institute, Singer and Litan argue that these and other charges stemming from various state and local rules could add $84 or more to a U.S. household’s yearly Internet bill.

“Although the state and federal governments collect these fees from broadband providers,” Singer and Litan write, “history shows — and economic models of competitive markets predict — that the fees are passed along to customers, just as they are now on telecommunication services. So consumers’ Internet bills will soon have all those random charges tacked on at the end, much like they see on their phone bills.”

The study is the latest effort by opponents of strong net neutrality rules to describe the potential economic fallout of regulating ISPs under Title II. Last month, telecom lobbyists argued to the FCC that aggressive regulation would slow down the pace of industry investment in network upgrades, to the tune of $45 billion over the next five years.

And there is this from the Heartland Institute, a free-market think tank:

On June 17, FCC Chairman Julius Genachowski pushed through a 3-2 vote along party lines to begin his agency’s process of reclassifying broadband Internet access under a more restrictive regulatory regime known as Title II. Once the Internet is reclassified as a telecommunications service rather than an information service under Title I, the FCC will have seized the power necessary to micromanage the vibrant medium we take for granted.

Numerous studies have found FCC enforcement of net neutrality rules would harm the digital economy and consumers. The research on net neutrality points out regulation would stifle innovation and impose costs that would be passed on to consumers. Study after study finds net neutrality is an attempt to fix a “market failure” that doesn’t exist.

A recent study from New York University concluded net neutrality would cost Americans 500,000 jobs and $62 billion over the next five years. The international market research firm Frost & Sullivan found net neutrality regulations would likely pass on to the consumer up to $55 per month in additional costs. These and other studies show a hands-off approach to Internet regulation maximizes social and economic welfare.

The rest of the Heartland post links to studies that discuss the impact to the economy and to consumers of these net neutrality laws.