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Wednesday, October 6, 2004
Chamber Releases Study Showing Telecom Reform Adds Jobs
Overhaul of Telecom Act Would Stimulate Economy
WASHINGTON, D.C. – The United States Chamber of Commerce today released a major independent study that finds more than 212,000 new jobs would be created and $127 billion a year would be added to GDP over the next five years if telecom regulations were overhauled.
The Chamber is studying the proposals presented in the report and how they relate to our policy and efforts to revive this vital industry.
“This study has identified areas where the government needs to step aside so that markets and technology can step in,” said Thomas Donohue, Chamber President and CEO, following a Telecom Summit on industry reforms. “While this study does not hold all the answers, it raises a number of questions the United States cannot afford to ignore if our telecom industry is to regain its vitality.”
Conducted by economist Tom Hazlett of the Manhattan Institute, Coleman Bazelon of Analysis Group, John Rutledge of Rutledge Capital Research, and Deborah Allen Hewitt, from the College of William and Mary, the study found:
- The telecommunications industry lost 380,500 jobs between March 2001 and May 2004 – a 29 percent drop – even as employment increased in other areas.
- Because outmoded regulations have created uncertainty for investors, market capitalization in telecommunications between March 2001 and July 2004 plummeted 67 percent. In dollar terms, market capitalization fell from $1.135 trillion to $375 billion.
- Telecom reform could generate a total of $58 billion additional capital spending on networks by industry sectors over the next five years, with capital spending raising output by $167 billion.
- Telecom reform has the potential to raise average annual GDP by $127 billion a year over the next five years, a total of $634 billion, and increasing average employment levels by more than 212,000 jobs over that same period.
“Telecommunications is the central nervous system of our economy,” said Donohue. “The current telecom law is hopelessly flawed, stifles investment and prevents the creation of American jobs.”
The U.S. Chamber of Commerce is the world’s largest business federation representing more than three million businesses and organizations of every size, sector and region.
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