WASHINGTON-The Telecommunications Industry Association on Monday told the Federal Communications Commission that the decline in wireless capital spending has been volatile and is indicative of a growing problem with severe impacts for the U.S. economy.
“Capital spending in the wireless segment of the telecommunications industry has been quite volatile over the past few years. Statistics show that capital spending by wireless carriers declined by 26 percent in 1999; however, in 2000, capex jumped by 71.2 percent for infrastructure, research and development and licenses. Once again, in 2001 and 2002, spending fell by 16.1 percent and 25.4 percent, respectively. Experts forecast that it will also continue to decline in 2003,” said TIA President Matthew Flanigan.
Flanigan’s hand-delivered letter to the FCC argues that reductions in capital spending, and research and development will have a negative impact on the U.S. economy.
“I am writing to express our growing concern about the profoundly negative effects that job losses, lack of investment capital and continuing reductions in capital expenditures (capex) by telecommunications firms are having on the research and development (R&D) programs of our member companies. . The dramatic downturn in the telecommunications sector has led to more than 500,000 job losses, $1 trillion in corporate debt and nearly $2 trillion in market valuation losses in the telecommunications industry alone since 2000. These developments have precipitated an unprecedented slashing of research and development budgets that seriously threatens the future of industry innovation, our global leadership in technology, and in some very important respects, the very security of the United States,” said Flanigan.
Flanigan’s letter was meant to influence the on-going debate at the FCC regarding incumbent local exchange carrier obligations when it comes to opening up their broadband networks to competition.
