This is an excellent piece of work sponsored
by New
Millenium Research. Robert Crandall, Charles Jackson, and
Hal Singer of Criterion
Economics show what a wonderful world it would be if Congress
and regulators would stop playing political games that keep broadband
rollouts from happening. Today's broadband is tomorrow's snail
mail. Deregulating telecom in the ways discussed in this paper
is one way to stimulate growth and productivity. It would also
cause the deficit to decrease, and it would generate income and
tax receipts.
Regulators and legislators have to start thinking
not only of capital investments today but for the next generation
and the generation after that. That requires capital spending.
Capital spending is really bottled- up energy to use in the future
for growth. The future is all about capital. Capital obeys the
fundamental laws of science. The first law of thermodynamics
says capital runs from low-return to high-return situations.
Policies that depress the return on capital drive capital away.
U.S. regulatory policy has posted a "not welcome" sign for capital
in telecom and technology in terms of forced access, price controls
(in the form of TELRIC), broadband regulations and the inherent
uncertainty of policy.
We hear a lot about regulators who are judging
their progress by how much they're able to show reduced prices
for services. Reduced prices are one of the implications of capital
spending, and they're happening at a rapid pace. What we should
measure regulators by is their degree of success in generating
capital spending. Capital spending is the seed corn for growth
and living standards for the future. Rent control lowers prices,
too, but it also can destroy the housing stock. Price controls
in telecom are another example of rent control, and they're doing
immense damage. We should do things that generate capital formation.
The complete report is available at New
Millenium Research. |
