Industry shouldn’t count on government bailout

BOCA RATON, Fla. – Despite the dire economic state of telecom– which has lost about 500,000 jobs and about $2 trillion in market valuation during the meltdown – the sector shouldn’t hope for government assistance any time soon, said Nancy Victory, assistant secretary of commerce for communications and information.

Speaking to reporters this morning at a press briefing following her remarks at the U.S. Telecom Association conference here, Victory said broadband tax credits designed to help spur investment have been discussed on Capitol Hill, but that the Bush administration has yet to take a position on that approach or more far-reaching forms of assistance.

“A bailout is not something that we have been seriously discussing at this point,” Victory said, “[and] I don’t know what the trigger point is.

“Let’s look at this in context. We’re also fighting a war, we’re also trying to do all of this stuff on homeland security. There are other competing concerns for these monies. That’s why I think that rather than throw money at a situation, what we’re trying to do is make sure we establish the right environment so that the industry can correct itself on its own.”

Victory added that government and the industry needs to work together to figure out why so many telecom companies have failed so miserably and fix what’s wrong.

“In my mind, the critical thing to do is make sure we have the right atmosphere where these companies can succeed, before trying to provide subsidies and continue to prop up something that may not be working,” she said.

In order to create the proper atmosphere, Victory said corporate responsibility must return to earn back the public’s trust, and barriers to broadband deployment must be removed at all levels of government.

Plus, policymakers need to understand fully the potential effect of new services and technologies upon important policy goals such as universal service. Victory said a number of fundamental questions currently are being asked – who should contribute, how should the contributions be calculated, who should receive support, and how should the subsidies be used – and that the process of adapting a “legacy program to the new reality of the emerging broadband world” won’t begin until they’re answered.

“And we need to be doing this now,” Victory said.

When asked to respond to criticism that President Bush has yet to declare a national broadband policy, Victory said the president has preferred to comment on a “high level,” – only stressing that policy reform must stimulate investment while assuring opportunities for “meaningful” competition – and has left the details to the agencies that are closest to the situation.

“We are seeing a different approach with this administration than with past administrations where we are trying to divide and conquer on the issues and coordinate behind the scenes, rather than fighting each other publicly on different points of view,” Victory said. “I think the FCC is going to be defining that broadband policy when they make their decisions on these various proceedings.”