- The Washington Times - Wednesday, September 28, 2005

Opportunities often come in the aftermath of catastrophes. Hurricane Katrina is no exception. The devastation caused by that storm creates an opportunity for telecom companies to deploy the type of ultra-modern infrastructure that will make the Gulf Coast a showcase for state-of-the-art communications services. This, in turn, will speed re-invigoration of high-tech manufacturing, a sector of the U.S. economy that has been in the doldrums for nearly five years.

To be sure, Katrina’s wrath should help stimulate high-tech manufacturing to some extent, even if networks are merely restored to what they were before the hurricane. The task of rebuilding telecom infrastructure just to bring back basic phone services in the huge 90,000-square-mile swath of the Gulf Coast that was decimated by Katrina is likely to cost as much as $1 billion. With Herculean effort, the region’s service providers already have made substantial progress in this undertaking. Moreover, the nation has been reminded again how much public safety itself depends on effective communications networks.

But Katrina has created an opportunity not just to rebuild what was there before and improve emergency communications capabilities. More than that, we can make the Gulf Coast a shining example of what modern technology can do by building new networks that provide consumers with the ability to obtain high-speed Internet connections and multi-channel interactive video programming, for example. The Gulf Coast can leap ahead of the rest of America, which unfortunately — and of great concern to anyone who cares about America’s future — has begun to lag behind such countries as South Korea and Japan in high-speed broadband. A report issued by the United Nations this summer concludes that 15 countries have a larger percentage of homes with high-speed service than does the United States.

A rapid reconstruction effort that provides Gulf Coast residents with robust, state-of-the-art communications networks is far more likely if Congress overhauls the nation’s severely outdated communications laws, something that it can and should do this fall. This summer, Sen. John Ensign, the Nevada Republican who chairs the Senate’s Subcommittee on Technology, Innovation and Competitiveness, introduced the most forward-looking and bold telecom-reform proposal that has ever been offered in Congress. The bill was cosponsored by Arizona Sen. John McCain. The Ensign-McCain bill calls for the immediate elimination of outdated regulations that have kept vigorous investment and innovation throughout the telecom industry — service providers, equipment makers and software developers — at bay. The legislation also updates vital consumer protection regulations to ensure that as technology continues to rapidly evolve, critical safeguards such as 911 and other public safety tools, protections from fraud and abuse and access for persons with disabilities must be upheld by all competitors in the new communications marketplace.

Continued heavy-handed regulation of this vital marketplace in the face of the growing competition that now exists throughout the telecom industry is harmful to consumers, who deserve access to innovative services and choices. It also is harmful to American workers and to our economy. Government micromanagement makes competition develop sluggishly. It slows investment in new high-tech products, and it undermines our nation’s competitiveness. Indeed, a study commissioned by the U.S. Chamber of Commerce has concluded that regulatory reforms like those provided in the Ensign-McCain bill would trigger $58 billion of capital investment in telecom infrastructure in five years, increase the nation’s GDP by more than $600 billion and add 333,000 new U.S. jobs.

A just-released study by In-Stat, a major market research firm, provides evidence that today’s over-regulation is depressing telecom investment and thus harming U.S. consumers. While phone companies in the United States and around the world are beginning to totally rebuild their networks to use what is called IP technology in order to provide video and data as well as traditional voice service, the In-Stat study’s author makes clear she believes that in the absence of a comprehensive update of our communications laws in the United States, the speed of the reconstruction will be slower here than elsewhere in the world since regulatory obstacles to investment are higher.

Numerous high-tech manufacturers around the country, including our companies, support the Ensign-McCain bill. For example, 43 telecom manufacturers of all sizes and producing a wide variety of products for the industry signed a letter to Messrs. Ensign and McCain endorsing the bill last month shortly after it was introduced.

Even before Katrina, our nation was on the cusp of a reinvigorated high-tech industry. If telecom regulation is reformed in the way that is proposed by the Ensign-McCain bill, the devastation wrought by Katrina can create an opportunity to make the embattled Gulf Coast area a showcase for telecom innovation, while helping to restore the high-tech industry’s health and spurring the deployment of communications innovation nationwide.

Robert J. Novak is COO and senior vice president of Charles Industries Ltd. Peter P. Savage is president and CEO of Hammerhead Systems Inc.

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