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News Release
July 24, 2002
CONTACT: David Fish
(202) 289-8928

Eisenach Responds to Broadband Critics
Washington Times Op-Ed Riles Defenders of Current Policies

WASHINGTON, D.C. - PFF President Jeff Eisenach responded to defenders of current telecom regulations in a letter to the editor in the Washington Times this week. In his response, he explained that current policies are hurting the IT sector, and expressed consternation at lobbyists “who have foisted upon the Bush White House the bizarre strategy of embracing the disastrous industrial policies advocated by Al Gore and put in place by the Clinton FCC.”

The exchange began with Eisenach’s opinion piece published in the same paper on July 10, “Time for a Tech Policy”. In it, he urged the Bush Administration to take action in four specific policy areas to revive the Information Technology sector. One of those areas is broadband, which he maintains is still the victim of Clinton-era over-regulation by the Federal Communications Commission. “[Broadband] buildup is being slowed by FCC rules limiting the profits that telecom companies can make on new investments by requiring them to share facilities with their competitors at cost,” Eisenach wrote in his initial op-ed. “Those rules need to be removed sooner rather than later, and the administration should tell the FCC to stop studying the issue and start deregulating.”

The op-ed prompted letters to the editor from AT&T lobbyist Charlie Black as well as CompTel President Russell Frisby, both of whom complained that Eisenach’s views were too deregulatory. Black wrote that “deregulation of the Bell Companies would make matters worse,” and argued that allowing competition would amount to “industrial policy” and “Federal meddling”. Frisby argued that current rules allow the Bell companies to make reasonable profits and thus do not deter investment. In reply, Eisenach pointed out the “Orwellian” nature of Black’s arguments, and noted that FCC rules allow profits only when measured against “hypothetical” costs. “In the real world,” Eisenach said, “’cost’ means what you paid for it, and profits happen when you sell it for more.”

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.



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