The Big Industry Lie: Regulation = Job Loss

My old friend Jay Stuckey has a saying that has stuck with me for decades: “Don’t let them piss on your leg and tell you that it’s raining.”

When Jay used it he was referring to politicians who lied to scare up votes. Today, this adage refers to powerful corporations that lie to scare politicians.

The companies in question are AT&T, Comcast and Verizon. And the piss that they’re spreading is misinformation about Internet regulation and America’s jobless recovery.

Today, a phone and cable-funded “think tank” joined a chorus of others claiming that the Federal Communications Commission's efforts to provide common-sense oversight of Internet providers would kill jobs in America.

Deregulation Dystopia

The path the FCC is considering is whether to “reclassify” Internet access services under a category – Title II – that would allow it to protect Net Neutrality and foster universal access to broadband. Both of these goals are priorities of President Obama’s economic recovery plan.

The FCC wants to restore open Internet protections. Under the Bush administration, the FCC deregulated high-speed Internet providers by relinquishing its Title II authority. At the time, the agency claimed this shift would foster competition and drive down broadband prices for consumers. Instead, it unleashed a torrent of industry consolidation that raised prices, slowed broadband services and otherwise left the United States far behind in every international measure of Internet success.

This radical move undermined the long-held assumption that nondiscriminatory communications networks were essential to free speech, democratic participation and economic opportunity.

Now, just as the FCC is on the cusp of reasserting its Title II authority to fix past mistakes, along come a slew of “studies” that claim that doing so would scuttle efforts to put Americans back to work.

Coin-Operated Analysis

Citing speculative job losses, the Progressive Policy Institute (PPI) study, released today, calls for a two-year moratorium on all FCC efforts to restore the agency’s role in safeguarding our Internet rights and spreading broadband adoption.

The study is part of a desperate strategy to spread fear and obscure the facts about Internet regulation, and pave the way for carrier control over online content.

What the study doesn’t say is that PPI has received funding from AT&T, as well as from the Lynde & Harry Bradley Foundation. I’m sure you’ve heard of the former. The Bradley Foundation, for its part, funds a right-wing cabal of anti-Neutrality groups, including the American Enterprise Institute, The Heartland Institute, the Heritage Foundation and the Competitive Enterprise Institute.

The PPI study, like other industry-funded efforts that came before it, is completely void of any actual evidence connecting broadband reclassification to job losses.

The Politics of Fear-Mongering

"Policymakers should recognize this 'study' for what it is -- part of a transparent attempt by the biggest phone and cable companies to raise unfounded fears about job losses in an election season,” says Free Press Research Director Derek Turner.

PPI’s report assumes that if the FCC has basic oversight authority, it will lead to bad outcomes. But history tells a different story. When the Bell companies were subject to the full weight of Title II, they increased employment by 15 percent, according to their own SEC filings. But once the FCC began dismantling these pro-competitive rules through massive deregulation, these companies shed nearly 40 percent of their work force, even as their revenues increased and profits soared.

AT&T and Verizon alone are responsible for tens of thousands of layoffs over the last two years. Verizon is accelerating its layoffs, while AT&T laid off 12,000 workers through 2009 and thousands more in 2010.

“Sadly, this pattern of ISPs destroying good jobs while reaping higher profits will likely continue with or without reclassification and Net Neutrality,” Turner says.

Telco Doublespeak

Here’s the rub: While the telecom companies are telling Washington that government oversight will freeze investment, they’re telling Wall Street just the opposite.

Time Warner Cable COO Landel Hobbs told an investor conference, “Yes, we will continue to invest, yes, we will participate in the Notice of Inquiries and we will have an open, healthy dialogue with the FCC throughout the whole process.”

Comcast Chairman and CEO Brian Roberts said, “The government is not a big worry.” And a reporter from the investment newsletter SNL Kagan covering Roberts' remarks at an industry trade show wrote, “Given the potential impact of reclassification on broadband pricing, Roberts said he expects the industry to continue to invest, innovate and work through the government issues.”

Verizon Wireless Chief Executive Lowell McAdam told the Wall Street Journal that the company has no plans to slow investment in its wireless broadband network as a result of the FCC’s move.

In effect, the phone and cable business appears to be “recession-proof,” even as these companies do nothing to prevent their hardworking employees from feeling the effects of the jobless recovery.

But the facts won’t stop them from treating your leg like a fire hydrant.