Net Neutrality

Testing the economics of the net neutrality debate

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Author Christopher Alex
https://doi.org/10.1016/j.telpol.2019.101869Get rights and content

Highlights

US Net Neutrality rules produced no impacts on telecommunication investment.•

Telecom new investment decisions showed no change after net neutrality rules.•

Paper utilizes comprehensive dataset with observations from Q1 2009 through Q3 2018.

Abstract

This paper examines the impacts of net neutrality rule changes in the United States in 2010, 2015, and 2017 on telecommunication industry investment levels. The paper tackles the issue with a comprehensive dataset with full time series coverage for all SEC-registered telecommunications firms from 2009 to 2018. The author tracks new capital expenditures incurred, which reflects new investment decisions made rather than old investment decisions materialized, with quarterly data and exact issuance dates. The paper uses a standard difference-in-difference model and a variety of robustness checks to examine causal impact effects of net neutrality rule changes. The paper finds net neutrality rule changes in the United States had no impact on telecommunication industry investment levels based on the data, outcome variable, and limiting assumptions used. This empirical question featured heavily as the key economic question in the 2015 Open Internet Order issuance and 2017 repeal process. However, research has failed to adequately address the question due to a short timeframe for research and methodological issues. The paper offers the only analysis with a full dataset and a sufficient time period of observation to properly examine effects. As such, it offers an incremental step forward in research assessing network neutrality empirically.

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