Wednesday, 17 August 2011 16:52

Obama’s Net Neutrality Rules Hurt Louisiana’s Job Creation

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EconomyThe recent announcement that the national unemployment rate is 9.1 percent has caused many to worry about the health of America’s economic recovery. With Louisiana’s unemployment rate at 7.9 percent in June 2011, there is little proof The Pelican State’s economy is improving.  However, the Obama Administration’s response has been to overlook the rise in unemployment and claim that monthly jobs numbers are volatile and often revised.  Just a “bump on the road to recovery,” according to Chief Economist Austan Goolsbee.


However, the uptick in unemployment just days into the Administration’s “recovery summer” highlights the uncertain path that lies ahead. Instead of blazing a trail that would encourage businesses to expand and add jobs, the Administration has continued to create potholes on the road to recovery. An example of this is clearly demonstrated than in the actions of the Federal Communications Commission.

Just days before Christmas last year, the FCC issued its so-called Net Neutrality rules, which many, including FCC Commissioner Robert McDowell, claim will harm industry and innovation. On the eve of passage, the Commissioner opined about the harm that these rules would be likely to cause.

“Analysts and broadband companies of all sizes have told the FCC that new rules are likely to have the perverse effect of inhibiting capital investment, deterring innovation, raising operating costs, and ultimately increasing consumer prices,” wrote McDowell. “Others maintain that the new rules will kill jobs.”

Notwithstanding the potential harm that could be inflicted on the telecommunications sector, the FCC plunged ahead. Yet, despite deeming these rules as essential to protecting consumers and innovation, the Commission has refused to actual publish the rules. The result, an enormous crater on the road to recovery that threatens an industry that has consistently added jobs and investment to America’s economy.

For example, from 2005 to 2009, the five year span surrounding the recession, the telecommunications industry invested over half a trillion dollars into wired and wireless infrastructure. This investment was accompanied by massive amount of job creation. One study states that in the last decade investment in the broadband sector by the telecommunications industry created over 434,000 jobs.

 Louisiana’s already struggling economy will be hard hit by a loss of telecommunications investment and employment. A recent TechAmerica Cyberstates Report found that over 44,000 Louisianans work in the high-tech and telecommunications industries—the very sectors that net neutrality will threaten.

Additionally, these jobs are significantly higher paying than many of the more recently created jobs. According to one estimate, high-tech wages are roughly 86 percent higher than other private-sector wages.

And, these jobs are not just for managing existing networks; individuals are also innovating and investing in new systems to manage energy, such as smartgrid technology, improve health care networks through electronic medical records and enhance education with more distance learning opportunities for students. Sustaining the investment in these systems promises to create jobs for years to come.

Despite all of these promises, now that unemployment has risen to over nine percent, Administration officials have to realize how fragile the economic recovery truly is. Net neutrality rules and other burdensome federal regulations have created an uncertain environment that threatens to slow the steady stream of capital expenditures and reverse the gains that have been realized in this sector despite economic hardship.

If Administration officials truly seek to make this a recovery summer they should start by paving over the regulatory potholes from last winter and clear the road of harmful federal rules.

Stephen DeMaura is the president of Americans for Job Security.


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