Study touts broadband benefits for California

As many as 73,500 jobs could be created in California during the next three years if state regulators change pricing strategies to encourage the expansion of broadband and other advanced telecommunications services, according to a recent report by the Alliance for Public Technology.

The report urges state regulators to change their strategy and ease the requirements for incumbent local exchange carriers (ILEC) to open up their facilities and networks to competitive local exchange carriers (CLEC). The report recommends ways that regulators can encourage CLECs to invest in their own facilities and networks rather than piggybacking off investments by the ILECs. This, in turn, should encourage the ILECs to improve their own facilities and networks, the report says.

The report asserts that changing the state’s regulatory framework will create an economic boom in the Golden State because telecommunications carriers will start making major capital investments and hiring. A significant shift in the regulatory framework for telecommunications carriers could create between 31,000 and 73,500 additional jobs in the next three years, APT estimates.

“In California, the current pricing structure discourages competition and results in less access to advanced technology and less choice for consumers,” says Richard A. Bilas, emeritus professor of economics at California State University in Bakersfield and a former president of the California Public Utilities Commission.

The current California pricing model “creates below-cost pricing,” Bilas says. “With below-cost pricing, less investment takes place and there are fewer jobs.” 

Advocates of the report say improved access to broadband in the state’s rural areas would help minorities, elderly and disabled people by offering access to distance learning, tele-medicine and telework opportunities that are otherwise not available in these regions.

Allen Hammond, president of APT and director of the Broadband Institute of California, said that the group studied eight rural counties in Central California. What APT found is that the existence of advanced networks helps “attract new business and investment, expand the reach of rural businesses, helps in meaningful job creation and in reducing the exodus of capable workers to urban regions,” Hammond says.

The report is entitled “Increasing Access to Telecom and Broadband Networks in California – Consumer Perspectives on Telecommunications Regulation.”

The APT is a non-profit organization in Washington, D.C., that lobbies for affordable access to communication services and technologies.  Specifically, the group represents the elderly, minorities, low-income groups and people with disabilities.