Broadband Investment As Economic Stimulus Is Tax-Free

By Xyla Joelle L. Fernandez

Dec 02, 2016 10:08 AM EST

Federal Communications Commission (FCC) has imposed so many onerous regulations - including reclassifying Internet providers into a category befitting of public utilities with considerable regulatory oversight - there should be little surprise why broadband investments fell 12% during the first half of this year.

Even more startling is that telecommunications providers have experienced an actual decline in the number of broadband subscribers for every consecutive quarter since the FCC imposed its reclassification and net neutrality regulations, according to compiled data from the Leichtman Research Group.

These regulations also appear to be inconsistent with the incoming administration's pledge to spur infrastructure investment, reduce regulations and stimulate the overall economy.

Together with the broadband investors looking for less uncertainty and more growth and earnings potential, these new regulations appear to some to be out of step with encouraging more investment and furthering a National Broadband Plan.

Historical data state that this study finds that for every billion dollars in revenue, core providers create 812 more direct jobs or about twice as many, when compared to edge providers.

When industry multiplier effects are included, this job differential results in 4,200 more jobs across the entire economy for every billion dollars of revenue, when compared to edge providers. In addition, core providers earned profits at lower rates and invested more back into the economy per dollar of value received in the market than did edge companies.

If Congress and the new Administration seek to revitalize the nation's infrastructure and create well-paying jobs, one way it can do that is by reforming and eliminating stifling regulations that currently discourage private investment and competition.

Since these reforms will not place any additional burden on American taxpayers, the resulting economic benefits will be a win-win for consumers and workers.

Policymakers need to do more to stop the re-regulation of the industry. To do this, they should reform and eliminate onerous telecommunications regulations, and they should act to level the competitive playing field between edge and core providers for the benefit of consumers and the general economy.

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