JANUARY 6, 2009 -- Adopting tax incentives for expanding next-generation broadband networks with direct fiber connections would ensure that the economic recovery package now under consideration in Washington would create a large number of jobs and extensive economic growth, according to a study released today by the Fiber-to-the-Home Council (search for FTTH Council).
The study, prepared for the FTTH Council by the economic consulting firm Empiris LLC, asserts that enactment of tax incentives for the deployment of networks running fiber all the way to premises would generate more than 200,000 direct jobs in each of the next three years and increase economic output by more than $100 billion. A key reason for the job growth is that labor accounts for almost one-half of the money spent to deploy networks with direct fiber connections. In addition to the direct effects, increased broadband penetration from these proposals would indirectly generate another 360,000 new jobs, according to the report. The report emphasized that, because broadband providers are experienced infrastructure builders, these and other tax incentives for new next-generation broadband infrastructure would create jobs and spur economic growth almost immediately. "Not only would these proposals create jobs and help boost economic recovery right away, but they will also accelerate expansion of the basic high-tech infrastructure that will drive the U.S. economy throughout the 21st century," said Jeffrey A. Eisenach, chairman and managing partner at Empiris.
The Empiris study estimates that federal payment of bond interest for next-generation broadband networks -- officially referred to as "tax credit bonds" -- would create 197,437 direct U.S. jobs as a result of private sector deployments and another 19,744 direct jobs in public sector deployments in each of the next three years. Meanwhile, a 100 percent expensing provision for next-generation broadband would produce as many as 32,000 jobs over the same period, while a 50 percent expensing provision for rural/underserved areas would potentially create more than 5,000 jobs, according to the study.
In rural and underserved areas, the FTTH Council supports tax incentives for broadband deployment at slower speeds to ensure that all Americans have access to broadband and to stimulate broadband deployment and economic activity in areas where they otherwise would not occur.
"In expanding America's broadband infrastructure, it makes sense to encourage the higher-bandwidth networks we will need to compete globally in decades to come," said Joe Savage, president of the FTTH Council. "This study provides evidence that promoting those networks also will give the maximum boost to employment and immediate economic growth."
The FTTH Council recently endorsed broadband incentives proposed by the Communications Workers of America, including provisions similar to those analyzed in the Empiris paper.
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