SOURCE: NoChokePoints Coalition

NoChokePoints Coalition

March 15, 2011 13:00 ET

Special Access Reform Would Increase U.S. Economic Output by Up to $37 Billion

Economic Study Finds Market Reform Will Spur Job Creation, Innovation and Investment

WASHINGTON, DC--(Marketwire - March 15, 2011) -  A major new economic study filed today with the Federal Communications Commission, conservatively estimates that reform of the high-speed broadband market known as "special access" would increase national output by as much as $37.7 billion and create as many as 176,000 new jobs across the U.S. economy, 70 percent of them in industries that rely on these connections to run their businesses.

"How many times do we need to be reminded of how important special access lines are to the national economy before the FCC stops 'studying' and starts acting?" said Maura Corbett, spokesperson for the NoChokePoints Coalition, a broad-based group of consumer and public interest groups, competitive providers, educational organizations and trade groups. "The FCC has in its hands the power to create positive economic growth, and it needs to use it."

The study, Economic Benefits of Special Access Price Reductions, confirms years of past studies on the hotly debated issue, including one submitted by AT&T just before it was acquired by the telecommunications incumbent SBC, that found that special access reform would increase national output by $11.6 billion and create 64,000 new jobs. A 2008 study by a group of the largest corporate users of broadband services in America found that inflated special access prices deprived the U.S. economy of $17.2 billion in GDP and 95,000 jobs. 

As the FCC's National Broadband Plan found, the number and importance of high-capacity broadband lines has greatly increased recently. This has resulted in the higher impact reported in today's study:

    50 State Average   Top 5 State Average
Increase in U.S. Output   $ 36.1 billion   $ 37.7 billion
Increase in U.S. Earnings   $ 7.6 billion   $8.3 billion
Increase in U.S. Employment   164,077   176,084
Increase in U.S. Value Added   $ 20.6 billion   $ 21.5 billion

The study, commissioned by Sprint, estimates the above economic benefits to the U.S. economy would likely occur in response to a significant reduction in special access prices to bring them in line with costs. 

"Currently, special access services produce excess rates of return as high as 77.9 percent," continued Corbett. "By contrast, the FCC's last authorized rate of return was 11.25 percent, a decent return in even a healthy economy. But we are not in a healthy economy, and cannot afford the special access drag on our growth and recovery. The FCC must act. Period."

About the NoChokePoints Coalition:
The NoChokePoints Coalition represents constituents, members, enterprise customers, competitive broadband providers and communities that rely on high-capacity "special access" lines. Access to a robust and competitive market for high-capacity broadband with reasonable prices and availability is the key to lasting economic growth, broadband deployment and job creation. Broadband access is a central part of the long-term agendas of the Obama administration, United States Congress, and the Federal Communications Commission. It is essential to the health of our information economy. To learn more about the coalition and how special access affects us all, please visit www.NoChokePoints.org.