Franco: Net Neutrality Debate in D.C. Could Impact California Jobs and Economy

Reuben Franco, President & CEO, Orange County Hispanic Chamber of Commerce

The Internet is the most important economic driver of our time and has seen an extensive wave of innovation in just the last few decades. California’s economy depends heavily on the tech sector. In 2017 alone, California’s tech industry created 43,600 jobs and contributed $385.8 billion – 16 percent – to the state’s economy. Almost 10 percent of the state’s workforce is employed in net tech.

That is why reinstating recently repealed federal net neutrality rules, also known as Title II, would be a major mistake and felt hardest in states like California whose economies rely on the tech sector. Although the state has pursued ways to protect its tech industry, including its own net neutrality law, continued success and development is dependent on an effectively-governed Internet. Particularly, one that ensures an open and free marketplace, without heavy-handed regulation and overreaching government oversight, to spur continued innovation, economic growth and job creation.

Some lawmakers are attempting to turn this important debate into a political issue for scoring points in the upcoming midterm election. Rather than focusing on passing comprehensive legislation that would actually ensure a fair and open Internet, they have pushed forward a resolution under the Congressional Review Act (CRA). It is a political stunt used solely as a partisan, arbitrary, and underhanded move that disregards formal debate and public input. It would reverse the Federal Communications Commission’s (FCC) repeal of utility-style regulations on the Internet that would have subjected it to Depression-era rules.

Title II could be disastrous for California’s economy. A study by The Phoenix Center, an independent assessor of the impacts of regulatory and economic policy, found that under those rules, broadband investment decreased by up to $200 billion from 2010 to 2015. That’s a tough number to swallow.

It’s even tougher knowing some lawmakers and activists want to bring those regulations back despite the decades of success a light-touch regulatory approach has yielded. In only a short period of time since the FCC did away with Title II, it was found that private investment in U.S. broadband infrastructure in 2017 rebounded to at least $72 billion. This was an increase of almost $1.5 billion from years prior.

Lastly, California’s net neutrality law is futile as it will not stand up to judicial scrutiny. State lawmakers likely don’t even have jurisdiction to put such a law in place. We need federal legislation, not a patchwork of rules. We need a permanent set of rules decided by Congress that protects a free and open Internet, while also ensuring the tech industry is able to continue its unprecedented expansion and innovation.

It’s time for Congress to pass comprehensive legislation that would protect the assets that have allowed the Internet to thrive and create the framework which so many local and state economies have grown. We need 21stCentury rules for a 21stCentury Internet.

Reuben Franco is the President and CEO of the Orange County Hispanic Chamber of Commerce. Prior to joining the OCHCC, Reuben spent 16 years in the banking industry, where he served as a lender to numerous entrepreneurs in Southern California. Reuben’s current work with the OCHCC is focused on advocating on behalf of business at the local, state and federal level and providing the needed resources it takes to help Orange County Businesses succeed.

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