TELECOM MANUFACTURERS PUSH JOBS BENEFIT OF BROADBAND DEPLOYMENT
The Telecom Industry Assn. (TIA), having been stymied for a year by the White House, Congress and a slow-moving FCC, said Wed. it had a new message for President Bush that it believed this time he would hear: “Jobs, jobs, jobs.” In a meeting with reporters, TIA officials said that after a year with little deregulatory action, continued decline in telecom spending and more job losses, they would renew their push of their message supporting regulatory reform that they said would spark the ailing telecom sector. They want the White House to respond with a mention of broadband in the State of the Union address.
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“That would be a significant signal to the industry, to Wall Street and to the Hill,” said Grant Seiffert, TIA vp- external affairs & global policy. TIA Pres. Matthew Flanigan said its leaders would step up their meetings with the Hill, FCC and had even requested meetings with Cabinet officials. The telecom industry doldrums are continuing to cost jobs and starting to force business to move overseas, Flanigan said. “Somebody has to listen,” he said. TIA is considering reprising the letter it sent to Bush 2 years ago, but this time it would focus on how a telecom recovery, spurred by broadband deployment, would lead to new jobs. Flanigan said with an economy still struggling to create jobs, and with an election coming next year, it was a message that should “get their attention.” “The President needs to make clear that broadband is a national priority,” he said.
Job loss continues in the telecom industry, Flanigan said, with 600,000 manufacturing jobs gone since 2000. But he said telecom-related jobs had a ripple effect and for every job created in the telecom sector, 4 jobs emerged in related sectors. A rapid deployment in broadband could begin to reverse the job trend in the U.S., he said. Broadband deployment could create 1.2 million jobs in the next 2 decades, with 250,000 within 5 years, he said.
The TIA issued a 5-point plan Wed. for a sustained telecom recovery: (1) A national broadband policy. (2) Implementation of the FCC framework for broadband deregulation. (3) Legislative tax incentives for broadband deployment. (4) Spectrum allocation for new services. (5) R&D funding for the communications sector. The plan came as TIA released a white paper, “The Economic and Social Benefits of Broadband Deployment,” that said the U.S. would fall behind Japan, Korea, U.K., Canada and other countries if “we don’t kick broadband development into high gear,” Flanigan said.
The TIA held a similar briefing with reporters last year, with a similar message. “We didn’t think we'd be back here talking about continued job loss,” Seiffert said. There has been some progress since last year, mainly in the broadband provisions of the FCC’s Triennial Review Order. However, the FCC was far too slow to release the order (which took 6 months from vote to order) and legal challenges are likely to slow actual implementation even longer, observers said. “We thought the rules would be implemented by business, not lawyers,” Seiffert said. FCC regulations have a lagging affect, he said, and it could be up to 18 months from time of implementation until the effects of the broadband provisions could be realized in the telecom sector.
“It’s not too late to have a positive impact in 2004,” Seiffert said of the FCC broadband regulations. “But if these issues aren’t addressed now, there’s a jeopardy of affecting 2004 sales.” TIA officials said they hoped the courts would move quickly on challenges to the FCC’s broadband ruling.
As part of a national broadband policy, TIA would like to see legislation that would establish a “date certain” for regulatory broadband relief to be implemented. Seiffert said it was important for telecom companies not to undergo another round of cuts in capital expenditures in 2004, which could be potentially devastating to the already ailing manufacturing sector. TIA said telecom market capitalization had fallen nearly $2 trillion since 2000.
Tax incentives also would help the cause, TIA officials said, and recent passage of the Jump-Start Our Business Strength (JOBS) Act (S-1637) by a 19-2 vote in the Senate Finance Committee is a step in the right direction. The bill includes a one-year broadband expensing provision that would total $110 million. Seiffert said TIA was working on having the provision added to the House version of the bill, which still is in the Ways & Means Committee. TIA said it supported other bills, including S-160, broadband expensing legislation by Senate Communications Subcommittee Chmn. Burns (R-Mont.).
Passage of the Commercial Spectrum Enhancement Act (HR- 1320), which cleared the House but now is stalled in the senate, also is critical, TIA said. Seiffert said TIA was prepared to circulate a letter urging removal of the controversial “Northpoint Amendment,” which would allow the nascent broadband and video service to have access to spectrum without going through an FCC auction. The amendment threatens to scuttle the bill, as many influential members, including Senate Commerce Committee Chmn. McCain (R-Ariz.) and House Commerce Committee Chmn. Tauzin (R-La.) strongly oppose it. TIA also called for the FCC to finalize service rules for the 1700 MHz band of spectrum.
The govt. also must do more for telecom R&D, TIA said. Of federal R&D research allocations for technology, only 10% went to telecom, which traditionally has funded its own R&D, Seiffert said. But with the reduction of capital expenditure, companies such as Nortel and Lucent have dropped R&D spending 28% and 38%, respectively. “Who’s investing in research?” Seiffert asked. “It’s very important for the sustainability of the industry.”