NCPA - National Center for Policy Analysis

Bush Challenged to Concentrate on Broadband Technology

July 8, 2002

President Bush is being urged to combat the depression in the technology industries by promoting broadband -- the final connection to homes and small businesses that ultimately feed the telecom infrastructure.

The broadband telecommunications industry that arose in the 1990s surpassed all expectations. But then government blunders all but extinguished its promise, experts contend, and the cost has been disastrous: with 34 major bankruptcies so far and 24 more expected, the collapsing communications industry -- 17 percent of the economy -- is the prime source of a $4 trillion dollar decline in the net worth of U.S. households.

  • The Telecommunications Act of 1996 promised to deregulate the telecom industry, but Congress and the Federal Communications Commission actually re-regulated it.
  • They imposed new layers of price controls and sharing requirements on high-speed access lines.
  • They gave new powers to state public utility commissions and they micromanaged contract negotiations between competitors, critics charge.
  • Then the Federal Reserve re-stated the value of the standard by which all earnings are measured, while the deflationary global recession set in.

Broadband advocates are calling on President Bush to give an emphatic endorsement of broadband deployment and encourage the Federal Communications Commission to move vigorously toward nationwide deregulation that preempts state regulations.

Source: George Gilder (Discovery Institute) and Bret Swanson (Gilder Technology Report), "Unleash Broadband," Wall Street Journal, July 8, 2002.


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