SOURCE: The American Consumer Institute

The American Consumer Institute

November 11, 2009 07:06 ET

American Consumer Institute Refutes Baseless Free Press Claims About Network Neutrality and Investment

ACI Calls Policy Makers' Attention to Facts About Investment

WASHINGTON, DC--(Marketwire - November 11, 2009) - Emphasizing its agreement that the FCC "...must be guided by evidence, not rhetoric," the American Consumer Institute today released a point-by-point report refuting the claims about investment and regulation made by Free Press. Given the close relationship between broadband network investment and consumer welfare, ACI found the Free Press contentions particularly hostile to current and potential network subscribers and misleading as a basis for emerging national broadband policy. In its critique -- "The Informed Policy Maker's Guide to Regulatory Impacts on Broadband Network Investment" -- ACI called attention to fundamental errors by Free Press in logic, facts, financial accounting practice and long standing principles of real investment. ACI's report concluded:

--  A basic principle of finance is that regulatory risk will tend to
    reduce investment;
--  It is nonsense to claim, as Free Press does, that network providers
    are "disinvesting" or that they "boost profits" by reducing investment; and
--  Returns on investment in applications and services are directly and
    critically dependent on the growth and quality of networks.
    

ACI Fellow Larry Darby noted: "I can find no basis in history, financial principles, commonsense, or in the Free Press' paper for concluding that proposed net neutrality regulations will have no impact on broadband network investment." A copy of the report is available at www.theamericanconsumer.org.

About The American Consumer Institute Center for Citizen Research

The American Consumer Institute Center for Citizen Research is a 501(c)(3) nonprofit educational and research institute. The Institute focuses on economic policy issues that affect society as a whole, and seeks to be a better and more reasoned voice for consumers, by using economic tools and principles to show that markets work best for the benefit for consumers. For more information about The American Consumer Institute, please visit us at www.theamericanconsumer.org.