Net Neutrality May Reduce Broadband Penetration: Report

By Anuradha Shukla, TMCnet Contributor

Net neutrality (News - Alert) can possibly alter the parameters built into operator business cases in a way as to increase the probable risk, according to Frost & Sullivan (News - Alert).

The Growth Partnership Company conducted a research on net neutrality's effects on consumers and the economy and says that net neutrality can possibly discourage infrastructure investment considerably since it alters the operator investment decision.

The reason for this is infrastructure investments are very sensitive to anticipated subscriber profit. Investments can be delayed or curbed by whatever decreases the anticipation of profit streams.

Regulators and legislators are worried that operators may be enticed to discriminate in their own services or third party partners' favor to the loss of competitive offerings.

Frost & Sullivan finds net neutrality to be very complicated. Operators are likely to lessen investment because of the increased risk in net neutrality. If they keep investments and just recover the expenses related with doing so from a different source, those expenses are eventually assumed by the consumer. If an operator is deprived of the opportunity to produce service profit, that operator would have no other choice but to implement other strategies for covering deployment expenses. Strategies may include passing the expenses down to the consumer, making service bundles limiting consumer choice or pass the expense down to content providers.

According to the research firm, net neutrality acts like Internet tax. It obliges network operators to overheads which lowers network investments, offering fewer opportunities to consumers and those using the operators' networks.

Proof supporting the idea that net neutrality is a lot more complex than just encouraging a level playing field is supplied by the report. Consumers, job growth and the economy can be considerably impacted negatively by policy looking to manage competition by manipulating operators' investment decisions. Public policy makers, legislators, network operators and service providers will have special interest on this report.

(source: http://4g-wirelessevolution.tmcnet.com/broadband-stimulus/topics/broadband-stimulus/articles/83996-net-neutrality-may-reduce-broadband-penetration-report.htm)