News

U.S. Chamber Weighs Costs

5/02/2004 8:00 PM Eastern

Regulatory uncertainty over the Internet-protocol telephone service that cable companies plan to provide could contribute to a weak rebound in the telecom sector, according to the U.S. Chamber of Commerce.

Thus, the business lobby has decided to launch a study to explore the instability in regulatory policy that could hold back that sector.

An estimated 600,000 jobs in the telecom services and equipment sector have been lost since January 2001, according to the chamber, which believes that it will take a more stable regulatory environment to encourage investment and get the industry back on its feet.

"We're seeing a broader economic recovery now, but telecom is still in the dumps," said Chamber director of technology policy Mike Zaneis.

The study, projected to take three to four months, will look at the economic realities of cable, wireless and wireline telephone companies and analyze the role regulatory uncertainty plays in constraining investment and innovation, according to Zaneis.

The end goal is a report that demonstrates the economic implications of such uncertainty, in terms of job losses and retarded development, and proposes tangible recommendations on which regulations need to be changed in order to breathe new life into the industry.

The FCC recently opened a rulemaking to explore how cable's voice-over-Internet protocol (VoIP) service should be regulated. The FCC effort, Zaneis said, "puts the investment incentive in question for companies."

Regulatory uncertainty makes companies tentative about spending lots of money to roll out new services, he said. The study will seek to make recommendations on a regulatory environment that can foster the cable industry's investment in new innovative services.

The Analysis Group, an economic consulting group in Washington, is taking the lead in conducting the study, in collaboration with the Manhattan Institute and Rutledge Capital Research.

"The telecom sector is such an integral part of the economy that it is going to have to be part of the recovery if it's going to be robust," Zaneis said.

States News Service

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