Connect with us

Documents

Communications Workers of America Proposals to Stimulate Broadband Investment

WASHINGTON, January 9, 2009 – Communications Workers of America proposes government programs to stimulate broadband investment to create jobs and jumpstart the economy.

Published

on

Broadband Documents

Communications Workers of America Proposals to Stimulate Broadband Investment

Editor’s Note: This document was provided by the Communications Workers of America on January 8, 2009. It is dated January 7, 2009, the the PDF of the document is available here. Or visit the BroadbandCensus.com Broadband Wiki.

Government programs to stimulate broadband investment will create jobs and help jumpstart our economy in the short-term while strengthening our nation’s competitiveness in the long-term. Every $5 billion invested in broadband infrastructure will generate 97,500 jobs in the telecommunications, computer, and IT sectors with multiplier effects throughout the economy. A seven percentage point increase in broadband adoption will create or save 2.4 million jobs annually. Accelerating the build-out of America’s advanced communications networks will assure economic growth, innovation, and job creation. Deployment of universal, affordable broadband also will help reduce health care costs, address our energy crisis, improve education and enhance the delivery of government services.

To be most effective, a broadband stimulus program should address: 1) slow broadband networks compared to our international competitors; 2) lack of broadband availability in rural areas; and 3) broadband affordability and digital illiteracy.

1. Fund S.1492, the Broadband Data Improvement Act (P.L. 110-385). Cost: $335 million over three years.

The House and Senate unanimously passed this legislation last session and the President signed the bill. It authorized grants to states to map broadband infrastructure and support demand-stimulation programs. However, Congress failed to allocate the funding needed to implement these programs. Since good data is required to effectively utilize limited resources, the broadband stimulus package should include funding for this legislation.

CWA recommends frontloading the funding based on the formula in the companion H.R. 3919, the Broadband Census of America Act that unanimously passed the House at a cost of $335 million over three years.

2. Temporary Broadband Investment Tax Credit for New Investment. By lowering the cost of capital, a broadband investment tax credit would encourage build-out in high-cost underserved rural areas and investment in next-generation high-speed networks. Each dollar invested in broadband due to the stimulus will result in several dollars of increased investment in other sectors because of “multiplier” effects.

How to structure tax incentives. A broadband investment tax credit program should be structured to incent two kinds of new broadband investment: 1) networks in rural unserved areas; and 2) high-speed advanced networks serving residential customers. CWA recommends tiering the incentives along these lines:

o New Investment in Rural and Underserved Areas. A 20% investment tax credit for additional investments in networks capable of at least 3 mbps down/1 mbps up.

o New Investment in Advanced Networks. A 40% tax credit for additional investments in networks capable of at least 20 mbps down/5 mbps up or advanced network capabilities.

o Investment tax credits should be available only for broadband capital expenses above 85 percent of the company’s previous year capex expense. (85% recognizes that in a recession, companies are likely to reduce capital expenditures between 10 and 20 percent). Companies should be required to demonstrate to the Department of Treasury that their 2009 capital investments are above 85% of the 2008 baseline. A similar process would be required for subsequent years. The program should last three years. (Companies that pay the Alternative Minimum Tax should also be eligible.)

3. Direct Grants to Support Rural Broadband. Unserved high-cost low-density rural areas will require additional support to make broadband build-out economic. CWA supports a program of matching grants, along the lines of the California Advanced Services Fund. Grant awards should be targeted to unserved areas, and priority given for higher speed investment. First priority should go to the private sector; if the private sector does not come forward, a public-private partnership or public entity could proceed.

4. Increase Broadband Adoption through Digital Literacy and Computer Ownership Many Americans report they do not subscribe to broadband even where it is available because they do not know how to access the Internet, do not see its value, or lack computer access. CWA supports several programs to address demand-side issues.

a. Tech Corps funded through grants to community-based organizations and libraries to fund tech corps members for digital outreach and training. 50 tech corps members in 100 locations = $250 million

b. Computer Microloans/Vouchers and Subsidized Broadband Access available through community-based or public programs to low-income households to purchase computers and receive free broadband access while they are paying off the microloan. The microloan option is modeled after a One Economy program. The voucher program should be means-tested, with distribution through schools, community-based organizations, unemployment offices, job training programs, and other agencies serving low-income households. The program can be implemented in conjunction with digital literacy programs, or programs such as those in Miami FL that provide free computers to middle- or high-school students who achieve academic success.

A $1 billion computer microloan/broadband access program reaching 4 million households could increase broadband access by six percent and result in 2 million new jobs.

c. Lifeline/Linkup subsidies for broadband access and equipment. The federal Universal Service Fund program of support for telephone service should be expanded to include subsidies for broadband access and equipment.

Broadband Investment Creates Jobs

Summary: Investment in broadband would create jobs, jumpstart our economy and improve our global competitiveness. For example, every $5 billion invested in broadband infrastructure would create 97,500 new jobs in the telecom, communications equipment, IT industries with multiplier effects throughout the economy in the year the investment is made. Broadband investment that leads to a seven percentage point increase in broadband adoption would create or save 2.4 million jobs throughout the economy.

Broadband and Job Creation • Multiplier effects. Every $5 billion increase in broadband investment would create 97,500 new jobs in telecom and IT with multiplier effects throughout the economy. Investment in broadband networks is comprised of network construction, equipment, and software. We use multiplier data from the U.S. Department of Commerce. While the exact “multiplier” effect of increased investment would depend on the precise mix, we estimate an employment multiplier of 19.5 for every $1 million invested.1

• Economic Jobs Impact. A seven percentage point increase in broadband penetration would create or save 2.4 million jobs throughout the economy. The indirect employment effects result from greater availability, increased competition, and lower prices. Based on Brookings Institution research, Connected Nation estimates 2.4 million new or saved jobs from a seven percentage point increase in broadband penetration.2

Additional Research on Broadband Jobs • According to a Department of Commerce study, communities with broadband added one percentage point to the employment growth rate, 0.5 percent to the growth of business establishments, and 0.5 percent to the share of IT establishments. 3

• A study of Appalachia found that firms in communities with broadband were 14 to 17 percent more productive than those in communities without high-speed Internet.4

1 Estimate based on RIMS II Model, Bureau of Economic Analysis, U.S. Department of Commerce; represents the average of the multipliers for Construction and Broadcasting and Communications Equipment ($5 billion x 19.5/$1million = 97,500 new jobs)

2 Connected Nation, “The Economic Impact of Stimulating Broadband Nationally,” Feb. 21, 2008 (http://www.connectednation.org/research/economic_impact_study/index.php). The Brookings study found that for every 1 percentage increase in broadband penetration, employment is projected to increase by 0.2 to 0.3 percent. Connected Nation found that broadband penetration increased seven percentage points above the national average in Kentucky (2005-2007) due to intensive demand-stimulation and network investment.

3 William Lehr, Carlos A. Osorio, Sharon E. Gillett, and Marvin Sirbu, “Measuring Broadband’s Economic Impact,” U.S. Department of Commerce, Economic Development Administration (Feb. 2006) (http://www.eda.gov/ImageCache/EDAPublic/documents/pdfdocs2006/mitcmubbimpactreport_2epdf/v1/mitcmubbi mpactreport.pdf)

4 Mark L. Burton and Michael J. Hicks, “The Residential and Commercial Benefits of Rural Broadband: Evidence from Central Appalachia,” June 2005, Paper prepared for the West Virginia Development Office, Center for Business and Economic Research, Marshall University

Drew Clark is the Editor and Publisher of BroadbandBreakfast.com and a nationally-respected telecommunications attorney at The CommLaw Group. He has closely tracked the trends in and mechanics of digital infrastructure for 20 years, and has helped fiber-based and fixed wireless providers navigate coverage, identify markets, broker infrastructure, and operate in the public right of way. The articles and posts on Broadband Breakfast and affiliated social media, including the BroadbandCensus Twitter feed, are not legal advice or legal services, do not constitute the creation of an attorney-client privilege, and represent the views of their respective authors.

Copyright

Cable From U.S. Embassy In Beijing Reveals U.S. Perspective on Trade Relationship

For all of the tough talk coming out of Congress as the United States and China embark on a high profile trade summit today, a confidential memo sent by U.S. Ambassador Jon M. Huntsman at the beginning of 2010 illustrates how the fortunes of the two countries have changed in modern times, and how the leadership of the United States is scrambling for innovative ways to readjust as its economic clout fades.

Published

on

For all of the tough talk coming out of Congress as the United States and China embark on a high profile trade summit today, a confidential memo sent by U.S. Ambassador Jon M. Huntsman at the beginning of 2010 illustrates how the fortunes of the two countries have changed in modern times, and how the leadership of the United States is scrambling for innovative ways to readjust as its economic clout fades.

The memo, dated January 28, 2010, appears to be addressed to various arms of the United States government, including White House advisors David Axelrod and Larry Summers, who at the time was the Director of the National Economic Council.

The document acknowledges that China’s market was the only source of growth for many American companies in 2009, and ponders the wisdom of aggressive retaliatory measures against China for not strictly protecting U.S. intellectual property rights, and for implementing policies that favor Chinese companies at the expense of American ones in China.

Huntsman, the memo’s author, makes clear that maintaining a healthy U.S.-China relationship is a difficult balancing act and that the results of this week’s trade summit in the U.S. will be a key marker in the ongoing and increasingly rocky trade relationship between the world’s two most powerful nations.

“We face a challenging year ahead in U.S.-China relations,” Huntsman wrote this January. “Ten percent U.S. unemployment coupled with our huge trade deficit with China, China’s increasing use of industrial policies to restrict market access, and an undervalued RMB, will bring greater tension to bilateral ties. The Google case adds fuel to the fire.

“In this context, it is critical that we find ways to better advance our bilateral economic policy. This will require sustained, focused interaction on a daily basis with the Chinese, but also serious thinking about what can be best accomplished in the run-up and at the key meetings like the S&ED and JCCT. We need to find ways to keep the relationship positive, but even more important to ensure the American worker, in particular, reaps the benefits of our bilateral economic engagement.”

“S&ED” refers to the U.S.-China Strategic and Economic Dialogue, an annual meeting between the U.S. Secretary of State and Treasury Secretary with their Chinese counterparts. It was established by U.S. President Barack Obama and Chinese President Hu Jintao to address key issues between the two countries such as trade, currency policy, the U.S.’ borrowing obligations to China, climate change and global monetary policy and politics.

“JCCT” refers to the US-China Joint Commission on Commerce and Trade, the commission that is meeting today to discuss and iron out trade issues.

Huntsman’s memo, made available online via Wikileaks late last week, presents Obama Administration officials with various policy options and their risks, and proposes practical ideas on how to engage the Chinese government, business sector and Chinese citizens with the United States.

Huntsman sketches out several areas in which the U.S. government can smooth the way for U.S. businesses to expand their operations abroad, and for the Chinese to expand their operations and to invest in the United States.

He suggests, for example, expanding public-private  sector partnerships modeled on the Aviation Cooperation program. The program now has 40 U.S. corporate members and has sponsored training for more than 100 Chinese aviation professionals, and has introduced U.S. firms and technology throughout China’s aviation industry and regulatory structure.

He also suggests reaching out to U.S. state economic development programs during the National Governors’ Association annual meeting and connecting those programs to their counterparts in China.

In addition, the U.S. government should make more information about business opportunities available on the internet in Chinese, he said.

“We should create many more Chinese language web sites that are directed at key secondary and tertiary cities in China,” Huntsman recommended. “The more we facillitate access to information about American business opportunities — whether through a national database or enhanced state and local databases — the better. We believe thinking local, start-ups and grassroots first is the preferable way to go in using the Internet.”

Huntsman also made a list of recommendations on expanding tourism and educational  travel for Chinese citizens in the United States, as well as relaxing export controls for “commercially-important technology.”

These are just a few of the many ideas the former Republican governor of Utah laid out for Obama Administration officials back in the United States as he contemplated the politics of the U.S.-China trade relationship.

“Recent issues related to indigenous innovation, express delivery and online-music content, for example, underscore that USG complaints about discrimmintory policies — absent a credible threat of retaliatory action or other leverage — are falling on increasingly deaf Chinese ears,” he reported in the January 2010 cable. “China’s relatively strong economic position in the wake of the global financial crisis has intensified that trend, as has Chinese hubris that it can call the shots and determine the playbook under which it operates without disclosing the same to foreign firms. While WTO dispute settlement has worked well when applied, many of the problems we face in China’s market do not fall within WTO disciplines.”

The ideas in the document, and the alternative path and tone it offers as a way to engage the Chinese, provides a striking contrast to the harrying rhetoric on Capitol Hill. U.S. lawmakers are growing increasingly impatient with the Chinese government as it unilaterally forges ahead with its growth in the global economy.

The U.S. Congress in 2010 has commissioned various in-depth fact-finding reports that are severely critical of the way China has impeded access to its market for U.S. companies with its indigenous innovation policies. The reports also document China’s efforts to require U.S. companies to share and ultimately transfer their intellectual property to local Chinese companies in joint ventures.

Last week, a group of 30 U.S. senators sent a letter to Chinese Vice Premier Wang Qishan to urge him to make progress in resolving some of the issues at today’s trade talks.

The Obama Administration’s approach of engagement rather than enragement is the only one that will ultimately bear fruit, argues Denis Simon, a long-time China hand and professor of international relations at Penn State University.

“I believe that we are going to be embarked on a trade war with China – I believe that it’s almost inevitable unless cooler heads do not prevail,” Simons said.

“The problem is that the United States is not prepared to recognize that the landscape, that the global innovation system is changing, and that the Chinese position in this system is not where it was 30 years ago,” he said. “China is in a much stronger position, it has much stronger market leverage, and we have to accept that we have to accommodate China in a way we have been unprepared to.

If we don’t understand how to develop a better working relationship with the Chinese, then we’re going to have absolutely no leverage whatsoever with China, and I would argue that we’re putting ourselves in a corner in which we’re not going to be able to call their bluff.”

Editor’s Note: The Intellectual Property Breakfast Club will hold a February 8, 2011 breakfast panel at Clyde’s in downtown Washington DC on China and IP. To register for this FREE event, click here.

Join us for a stimulating, high-level discussion!

Continue Reading

Broadband Data

Study: FCC Could Improve Data Collection Practices

WASHINGTON, March 2, 2010 – The Federal Communications Commission could do a better job of collecting and managing the information it gathers from consumers, businesses and other entities, according to a new Government Accountability Office report.

Published

on

WASHINGTON, March 2, 2010 – The Federal Communications Commission could do a better job of collecting and managing the information it gathers from consumers, businesses and other entities, according to a new Government Accountability Office report (pdf).

According to GAO’s review of 30 information collections conducted by the FCC, the agency’s bureaus and offices collect and manage information in many different ways. For example, FCC collects and manages 14 of the 30 information collections electronically, while it collects and manages some information in paper format. FCC disseminates information from 11 of the 30 information collections on its Web site, while it disseminates some information upon request, but in a redacted format.

It gathers information on a wide variety of subjects, and the FCC estimates that it receives nearly 385 million responses with an estimated 57 million burden hours associated with the 413 collection instruments it uses.

Some of the information it gathers are company filings such as television station ownership, consumer complaints and company financial and accounting performance.

The study found some weaknesses in the way it treats the gathered information. For example, GAO recently reported that FCC rarely includes the text of a proposed rule in its Notice of Proposed Rulemaking. Stakeholders agreed, according to the GAO, that FCC does not initially specify the information that it wants to gather in the notice; the lack of specificity makes it harder for stakeholders and the public to provide meaningful input on the proposed information collection instrument.

The FCC responded to the report prior to its public release in a letter, which the GAO included at the end of the report. The agency said its chairman, Julius Genachowski, has made” modernizing and reforming the FCC’s data management processes a priority.” Additionally, it acknowledged that the agency’s Web site and database infrastructure are “many years out of date” and that it hopes to make upgrades. It also has launched an initiative that will combine all the functions of the many current systems into one consolidated system.

Continue Reading

Documents

BroadbandCensus.com Posts NTIA/RUS Broadband Infrastructure Application

WASHINGTON, July 8, 2009 – One week after the release of the two Notices of Funds Availability for broadband stimulus grants, the National Telecommunications and Information Administration had not posted the online applications as of 5:15 p.m. ET, although they were promised on July 7, 2009.

Published

on

WASHINGTON, July 8, 2009 – One week after the release of the two Notices of Funds Availability for broadband stimulus grants, the National Telecommunications and Information Administration had not posted the online applications as of 5:15 p.m. ET, although they were promised on July 7, 2009.

BroadbandCensus.com here posts a copy of joint application for the Broadband Infrastructure Application:

Continue Reading

Recent

Signup for Broadband Breakfast

Get twice-weekly Breakfast Media news alerts.
* = required field

Trending