Written Submission of the Competitive Enterprise Insititute Regarding the Telecom & High Tech Manufacturing Sector
Commerce Secretary Don Evans has initiated a federal review to ensure that "the government does all it can to create conditions that allow manufacturers to maximize their competitiveness and spur growth." The Department of Commerce has hosted several "Manufacturing Roundtables" across the country, including one for telecommunications manufacturing in Manchester, New Hampshire on May 29. Corning represented the telecom manufacturers, explaining the harms caused by economically irrational state and federal telecommunications regulations. Such regulations have resulted in massive losses of investment and jobs, and the loss of research and development funding.
These comments further describe the role that regulation has played in the slowdown of the telecommunications manufacturing sector. We address, in particular, the impact of the Federal Communications Commission’s regulations concerning unbundled network elements, or UNE’s, adopted in proceedings concerning local telephone competition and recently revisited in the FCC’s “Triennial Review.” These regulations in effect set price controls for the wholesale local telephone carriage market, discouraging efficient investment in that sector. Furthermore, the regulatory regime has been plagued by uncertainty due to litigation and overlapping state and federal jurisdiction. In conclusion, we propose changes to the telecommunications regulatory regime to correct these problems, including not only specific reform of the telecommunications sector, but an overall program of regulatory reform.