Seems legit –
Trump economic report relies on “pseudo-economics.”
Economic Report of the President “claims that” the Trump Administration’s’ Restoring Internet Freedom ‘order will increase real incomes by more than $ billion per year and consumer welfare by almost $ billion billion per year. ” That’s in reference to the Federal Communications Commission’s repeal of net neutrality rules and its related deregulation of the broadband industry.Unlike line sharing, the net neutrality rules did not address the competition problem that today leaves many Americans with a (choice of just one or two high-speed providers . Instead, the rules prohibited certain kinds of anti-consumer behavior that ISPs are more likely to pursue when they have virtual monopolies over Internet access. The The Obama-era rules banned blocking, throttling, and paid prioritization; Forced ISPs to be more transparent about prices and the consequences of going over data caps; and gave consumers more legal avenues to complain about harmful business practices.
In addition to clumsily equating line sharing with net neutrality, the white house analysis ignored what happened during the years net neutrality rules were in effect. FCC Chairman Ajit Pai claims that net neutrality rules reduced investment in broadband networks and that repealing the rules caused providers to expand their networks. In reality, industry data touted by the cable industry shows that broadband speeds soared while net neutrality rules were enforced , and major ISPs admitted to investors that the net neutrality rules did not affect network spending . FCC data shows that broadband networks grew at about the same rate before and after the net neutrality repeal.
Step 1: Kill privacy rule. Step 2:? Step 3: Profit
The report then claims that “Overturning the FCC’s opt-in rule resulted in lower prices for wired and wireless Internet service.” Using Consumer Price Index (CPI) data, the report says the wired and wireless declines “are about $ 68 per subscriber over the life of the subscription. ” But the White House report does not explain why Congress’s action to prevent enforcement of a privacy rule that never took effect would be the sole factor leading to a price decrease. The report also does not note that the CPI broadband data excludes rural services , relying only on prices in urban areas. Additionally, a White House chart only includes and data, failing to mention that the government CPI data shows that Internet prices have gone back up since
Despite all those problems, the White House estimated “an aggregate annual savings in subscription fees of $ billion (and attributed the savings entirely to elimination of the privacy rule . “Pseudo-economics” “One of the fun things about how folks use pseudo-economics in public policy is that you can use it to justify all kinds of price gouging and other consumer harms as ‘efficiencies’ and then make up a model that produces some suitably impressive number of ‘consumer surplus’ that makes it all seem OK, “Harold Feld, a broadband-industry expert who is senior VP of consumer-advocacy group
Public Knowledge , told Ars today. “This report is like a master class in the genre. Somehow, despite the fact that everyone paying for broadband can tell you their bill keeps going up, we are supposed to believe that when you look at the bill the right way you are actually paying less. ”
Feld also pointed out that “much of the supposed ‘consumer surplus’ and ‘cost reduction’ comes from behaviors that ISPs claim they are not doing and would never do, “such as prioritizing Internet content in exchange for payment and favoring their own affiliates.
Even if the report was accurate, “it still misses the point that these ‘efficiencies’ and ‘consumer surplus’ are achieved by letting ISPs exploit their market power and exploit their access to our personal information, “Feld said. “To put this in economic terms, the supposed efficiency gains and consequent consumer surplus is entirely captured by the oligopoly. To translate to English, you’re getting ripped off and being told to love it.”
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