Broadband Deregulation is Essential for the Revitalization of the Communications Industry

The Eastern Management Group Addresses Citizens for a Sound Economy Foundation (CSEF) on the Merits of the Internet Freedom and Broadband Deployment Act

Speaking at a luncheon today on the topic of broadband deregulation, John Malone, president and CEO of The Eastern Management Group, stressed the importance of leveling the playing field by giving regulatory parity to all participants in the high-speed Internet market.

The industry expert encouraged the audience, which included Congressional staffers wrestling with a spate of competing broadband bills, to lift the undue regulatory burdens on telecom carriers that have created a market dominated by cable companies.

“Cable carriers run the broadband market today, however these companies are not ready to lead the digital revolution, they are more focused on expanding their cable channel lineup than on bringing broadband to the masses,” affirmed Mr. Malone. “I don’t need five more channels of C-SPAN, I need high-speed Internet.”

“By allowing the incumbent telecom carriers to earn a suitable return on their investments, the Internet Freedom and Broadband Deployment Act (H.R. 1542) will promote a resurgence in technology and infrastructure spending that our industry so desperately needs, while achieving the goal of universal broadband service,” said Mr. Malone.

Malone went on to address Wall Street’s requirements for the broadband industry and how to reverse the downward spiral in the telecommunication industry. “The telecom sector is in the tank. Investors want to see rapid deployment in the broadband market, which will generate revenue and, in turn, profit. We need to jumpstart this industry which is currently operating off a drained battery.”

Malone urged Congress and regulators to do their part by allowing the incumbents to reap a suitable return on their investments in newer technology platforms like DSL and fiber to the home (FTTH). According to Mr. Malone, new investment will promote a flurry of spending that will benefit the infrastructure manufacturers and software companies. The benefits to consumers, the telecom veteran stressed, are limitless, as increased deployment of broadband connections to the home will result in new applications, greater choice and lower prices.

“The longer the delay, the more elusive the cure,” Malone iterated. “As soon as you allow the incumbent local exchange carriers (ILECs) to invest in these new networks and technologies, they will invest. This will bring us out of the slump we are in today.”

The Eastern Management Group is one of the oldest and largest management consulting firms focused exclusively on the communications industry. The company, with offices in the U.S. and Japan, serves over 400 communications industry clients worldwide including carriers, manufacturers and software companies ranging from start-ups to Fortune 50 businesses.