Page 33 - PCCA Journal 2nd Quarter 2012

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PCCA Journal|2
nd
Quarter 2012
33
A
recent economic analysis of the
impact of rural telecommuni-
cations companies finds they
stimulate significant economic activity in
both rural and urban areas. The report,
The Economic Impact of Rural Telecom-
munications: The Greater Gains
, was
authored by Hanns Kuttner, a visiting
fellow at the Hudson Institute.
The report is especially timely given
recent Federal Communication Commis-
sion efforts to reform the federal Univer-
sal Service Fund (USF). The providers
analyzed in the report serve consumers
in high-cost, rural areas and depend on
support from the USF to enable invest-
ment and ongoing operations.
Beyond the specific benefits of a
nationwide telecommunications network
examined in prior research, Kuttner
noted: “These remarkable results provide
a clearer understanding of the impact of
rural telecommunications on rural and
urban areas, consistent with the values
underpinning access to advanced tele-
communications and advanced services
in all regions of the nation, as supported
by the Universal Service Fund.”
“While the industry’s output is tele-
communications services in rural areas,
the economic activity it generates ac-
crues both to the rural areas served and
also to urban areas,” the report finds.
“Rural telecom companies often must
draw on markets outside their own ser-
vice areas to find the goods and services
they require.”
In fact, according to Kuttner’s analysis,
almost half of the jobs supported by the
economic activity of rural telecommuni-
cations companies are in urban areas.
This analysis provides a clearer un-
derstanding of the far-reaching impact
these companies have on other firms
and economic activity beyond their areas
through the purchase of everything from
fleet vehicles and equipment to modems
and other telecom components.
Kuttner noted just how significant this
impact is. The economic effects of the
rural sector of the telecommunications
industry are both direct and indirect. It
was responsible for $14.5 billion in eco-
nomic activity in 2009, an amount that
supported 70,700 jobs. A majority of the
economic effect is demand outside the
service area of the telecommunications
provider. The current patterns show how
much change in economic activity could
be expected if the sector expanded or
contracted in response either to changes
in demand or changes to the current
mechanisms that support universal ser-
vice.
“A loss of revenue from the USF would
diminish the economic activity of rural
telecommunications providers, causing
negative ripple effects to spread out-
ward locally, regionally, and nationally,”
Kuttner cautioned in his conclusion.
The Hudson Institute, a nonpartisan
policy research organization, prepared
the report for the Foundation for Rural
Service, which in cooperation with the
National Telecommunications Coopera-
tive Association, seeks to sustain and
enhance the quality of life throughout
rural America by advancing an under-
standing of rural telecommunications
issues. The report and more information
are available at www.frs.org.
News Briefs
News Briefs continued on page 34
Report Finds That Rural Telecom
Activity Benefits Rural and Urban Areas
D
espite substantial bipartisan support, an extension
of the federal wind energy Production Tax Credit
(PTC) was not included in the payroll tax legislation
that President Obama signed into law in February.
“The stakes here could not be clearer,” said American
Wind Energy Association CEO Denise Bode. “Economic stud-
ies have shown that congressional inaction on the PTC will
kill 37,000 American jobs, shutter plants, and cancel billions
of dollars in private investment. Congress needs to under-
stand that, with PTC uncertainty, layoffs have already begun
and further job losses and even plant closings will accelerate
with each month we near expiration in December.”
“Support for an extension to wind power’s key federal tax
incentive is both broad and growing,” Bode continued. “In
just the past 24 hours, leaders as diverse as Rep. Steve King
(R-Iowa), Governor Mary Fallin (R-Okla.), and Governor John
Kitzhaber (D-Ore.) joined corporate icons like Nike, Campbell
Soup, and Yahoo in calling for a speedy extension to wind
power’s critical federal tax incentive.”
AWEA Decries Lack of PTC Extension