TIA outlines concerns over reduced telecom equipment spending effects

Nov. 26, 2002
Nov. 26, 2002 - Flanigan letter notes steep declines in R&D programs.

The Telecommunications Industry Association today hand delivered to the five members of the Federal Communication Commission a letter outlining the association's concerns over the long-term damaging effects of reduced telecom equipment spending by network operators and the resulting plunge in research and development efforts by the communications equipment sector.

In the letter addressed to Chairman Michael Powell, TIA President Matthew Flanigan presents the available data demonstrating the steep declines in the R&D programs of selected TIA member companies. The letter notes that this situation is attributable to the dramatic year-over-year reductions since 2000 in operator capital expenditures, which Flanigan notes is the "lifeblood of [TIA] member companies' R&D programs."

These developments, offers Flanigan, "seriously threaten the future of industry innovation, our global leadership in technology, and in some very important respects, the very security of the United States."

The TIA believes that a key to recovery for the depressed telecom sector is widespread broadband deployment. In the letter, Flanigan points to the nexus between the right regulatory framework and increased investment in broadband networks. In order to ensure that its regulations do not deter such investment, Flanigan again asks the FCC to adopt the TIA's recommendations in the Triennial Review of the Unbundling Rules proceeding.

The TIA and the High Tech Broadband Coalition, of which the association is a founding member, have asked the FCC to determine that the unbundling rules under Section 251 of the Telecommunications Act of 1996 do not apply to new, last-mile broadband facilities, including fiber and digital subscriber line (DSL) and successor electronics deployed on the customer side of the central office. The letter concludes that such a determination would encourage facilities-based competition and an influx of investment.

"It not only would signal the importance of broadband, but would help return the flow of capital into the sector, encourage service providers to invest once again in new equipment and allow industry to pour money back into R&D," concludes Flanigan. "Our industry then would be better situated to widely build out the advanced networks that will support the growth of innovative products and services, thus growing the industry's way to profitability once more."

The TIA is based in Arlington, Va. For more information visit www.tiaonline.org.

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