Would impose obstacles for investors in telecommunications
By Jim Gerace
In these uncertain economic times, it is critical that our lawmakers in Albany make good decisions that promote jobs, investment and innovation. Wise public policy decisions are those that encourage job creation and investment in communities throughout by helping to grow the state’s “innovation economy.”
New York’s innovation economy is based on our strengths—a well-educated work force, a strong higher education sector, a commitment to research and innovation, and a robust telecommunications infrastructure. These assets are the key to our success in the global economy today and for our children in the years to come, because they facilitate growth in emerging arenas.
Unfortunately, some lawmakers in Albany have lost sight of the need for investment in the telecommunications infrastructure, such as broadband. They are pushing a bill, inspired by outdated economic theories, which would require some telecommunications companies to turn over 40 percent of their New York-based infrastructure to the government if they are ever sold or decide to merge with another company.
This bill would severely hurt Verizon, New York’s leading provider of broadband infrastructure, by, in effect, imposing a 40 percent tax on the proceeds of telecommunications company business deals. This is 1970s regulation policy run amuck.
This bill would also hurt New York’s economy. It would impose a huge obstacle to anyone who wants to invest in the state’s telecommunications infrastructure. Would you invest in a broadband company if you knew that the government might swoop in and grab nearly half of your investment? Most people would not.
Verizon is a part of New York’s innovation economy, and its network is part of the fabric of New York. We want to help the state grow and succeed, and to create high-paying, quality jobs. Statistics show the average salary of an individual who works in the innovation economy is more than double that of an individual who works in the non-innovation economy. These jobs also have a higher “multiplier effect” than the non-innovation economy, meaning that for every job that is created in the innovation economy, 3.5 jobs are created overall, compared to 1.7 jobs in the non-innovation economy.
New York has the tools to succeed in a number of key innovative industries—strong educational institutions focusing on life sciences, clean technology and nanotechnology. We also rank among the nation’s leaders in science and engineering, patent development and alternative energy use.
But if we undermine our commitment to a robust telecommunications infrastructure, then we undermine the innovation economy.
Rather than help grow New York’s innovation economy, this bill will stifle it. We can’t afford to make this mistake.
We need to encourage Albany, especially the State Senate, to focus on economic growth and building on our strengths. Broadband investment is an essential component of a successful 21st-century economy.
Imposing a 40 percent tax on the companies that want to invest in New York is simply not the way to encourage investment in our broadband infrastructure. It is a giant step backwards, not the way to grow New York’s innovation economy.
Jim Gerace is president of Verizon’s New York region.
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