‘It is time for the Administration to end its silence on telecom ...

“It is time for the Administration to end its silence on telecom deregulation and take a stance squarely in favor of eliminating disincentives to investment in broadband infrastructure for all technologies, including cable and wireless as well as telephony,” group of economists wrote Tues. Addressed to Commerce Secy. Donald Evans, Treasury Secy. Paul O'Neill, White House Council of Economic Advisors Chief Glenn Hubbard and President Bush’s economic adviser Lawrence Lindsey, economists said IT investments fueled as much as 25% of gross domestic product growth in 1990s but had led economic decline in last year. Economists -- Brookings Institution senior fellow Robert Crandall, Discovery Institute senior fellow George Gilder, Manhattan Institute senior fellow Thomas Hazlett, Kudlow & Co. Chmn. Lawrence Kudlow, Citizens for a Sound Economy counselor James Miller, Cato Institute Chmn. William Niskanen and senior fellow Alan Reynolds and Progress & Freedom Foundation Pres. Jeffery Eisenach -- specifically urged Administration to back pro- Bell deregulatory bill sponsored by House Commerce Committee Chmn. Tauzin (R-La.) and ranking Democrat Dingell (Mich.). Just last week, senior Commerce Dept. official expressed Administration reluctance to choose sides in Tauzin-Dingell debate (CD Dec 3 p2). Noting that Bells had interconnection obligations with broadband providers and limits on where they could transmit data, economists said “these regulatory burdens, particularly mandatory facilities-sharing requirements, reduce the incentives of telecom companies to invest in new or modernized facilities, including those needed to provide affordable broadband services to homes and small businesses.” Tauzin-Dingell addresses only part of regulatory burdens facing broadband deployment, economists said, and “widespread diffusion of high-speed Internet access [could result in] between $100 billion and $500 billion per year in increased consumer and producer surplus.” “The Internet, in its current form, has reached a plateau in terms of functionality and value to consumers. There is only so much one can do with a static Web page accessed at dial-up speeds.” They said barriers to IT investment needed to be removed so services such as streaming music and video, voice- over-Internet-protocol, next-generation games and other services could grow. Despite current struggles of many IT companies, however, economists said focus should be on deregulation, not industry bailouts: “We would be the last to argue that government should step in to subsidize or provide other special assistance to any particular economic sector of the economy.” Economists sent copies to House and Senate leadership as well as FCC Chmn. Powell.