Policy Group Says Telecom Act Boosted Employment

WASHINGTON, Oct. 20 -- Despite job losses attributable to a weak economy and the burst of the Internet investment bubble, total employment in the telecommunications industry's wireline sector has increased significantly because of the additional competition and investment stimulated by the 1996 Telecom Act, says one public policy group.

According to the Phoenix Center for Advanced Legal & Economic Public Policy Studies, total industry employment was 92,000 higher in July 2003 than it would have been without passage of the 1996 Act.

"Government data shows a steady drop in telecom industry employment in the five years before passage of the 1996 Act," said the group in a bulletin. "On average, telecom employment fell 2.3 percent per year between January 1990 and January 1995. Total employment in the industry fell by nearly 80,000 during that period (from 676,000 to 595,600 jobs). The Department of Labor's Bureau of Labor Statistics had predicted the down trend would continue at least through 2004."

But the employment trend reversed dramatically after enactment of the 1996 Act, according to the Phoenix Center.

"With the entry of new competitors in the wireline market for local phone service employment in the sector climbed 5 percent annually between February 1996 and April 1, 2001. Employment has fallen from the April 2001 peak but has still climbed significantly because of the act," it said.

The center said its research shows new entrants in the local phone market (CLECs, competitive local exchange carriers) are responsible for virtually all of the job increases, and that each additional CLEC in a state increased telecommunications employment by nearly 200 jobs.

"Any effort to blame recent employment declines on unbundling is contradicted by the empirical evidence," the center said.

The Phoenix Center supports preserving regulations that have allowed AT&T Corp., MCI and others to compete in the local residential phone market with the Bells.

For more information, visit: www.phoenix-center.org