Template Tools
| Wall Street Confirms: Modest if Any Investment Effect of Net Neutrality |
| Wednesday, 14 July 2010 17:07 |
 Net neutrality/reclassification opponent Thomas Seitz (Height Analytics and previsously Barclay) today joined the parade of top analysts doubting the claims that Net Neutrality rules would produce a serious cutback in broadband investment.Washington is inundated with claims NN will clobber investment, but the carrier CFO are telling Wall Street it won't be a determining factors. Seitz joins John Hodulik of UBS (voted #1 telco analyst), Craig Moffett (voted #1 cable analyst) and Michael Rollins of Citigroup as well as several others who haven't gone on the record. There are plenty of sensible arguments against Net Neutrality, voiced by Dave Farber and others. Governments frequently muck things up when they get involved. But the "investment will be clobbered" doesn't stand up to the facts. A panelist added "competition is a far more important factor in driving investment. ... the market usually adjusts to things like this successfully." Columbia's Bob Atkinson, who led a factfinding report on future broadband investment for the plan, at the NYLS seminar said he didn't think NN - or most other policy measures - would have a major impact. Atkinson and Schultz's paper is used by all sides in D.C. as a primary reference.
Seitz thought "Title II reclassification" to enable NN would be bad for investors, but probably not NN itself. "It's the nose of the camel in the tent. The real investor fear is that the laws other provisions - including 'reasonable and fair prices' - might be enforced. It's those other issues that make people fear reclassification." Moffett is even more blunt. "Importantly, the regulatory issue here has nothing to do with 'net neutrality.' The section of the Communications Act mandating 'just and reasonable rates' – opens the door to broader price regulation."
Hodulik a while back researched the technical side of the issue and discovered that at modest cost most large networks had avoided congestion. Glen Campbell of Merrill Lynch looked at wireless costs, and even on wireless the cost of additional bandwidth was significantly but not enough to change the economics of the service.
The seminar was brought together to present a paper by Chuck Davidson that came to an opposite conclusion. It's to his credit that he invited several people who might - and did - disagree strongly. That's what academia should be about.
|
| Last Updated on Wednesday, 14 July 2010 19:47 |