January 15, 2002 -- The telecommunications industry can pull the U.S. economy out of the doldrums by creating jobs and generating billions of dollars in growth annually if policymakers develop a coherent, symmetrical national policy on broadband, according to Edward E. Whitacre, Jr., chairman and chief executive officer of SBC Communications, Inc. (NYSE: SBC).

Addressing federal and state regulators and industry leaders at the Emerging Issues Policy Forum in Florida, Whitacre said, "America cannot lead the world in growth if we don't act soon to remove the narrow-band governor on our economy."

Whitacre cited an estimate by Brookings Institute economist Robert Crandall that accelerated broadband deployment could generate half a trillion dollars annually in economic growth without increased government spending or taxes if the market were allowed to work fairly. Today, less than 10 percent of Americans have broadband service, too few to attract the investment needed to deliver on the promise of the technology.

One reason for the slow pace of broadband deployment, Whitacre said, is that only one of the competing broadband technologies, telephone company-provided DSL, is regulated - even though DSL serves only about 28 percent of the broadband market. In contrast, cable providers control 70 percent of the broadband market and operate unburdened by regulation.

Whitacre said the current "asymmetrical" regulatory environment gave all competitors but one - the telephone companies - "free rein to operate without concern for added cost and delay that regulation inevitably brings." That situation, he said, is "bad news ... for consumers who deserve a full range of broadband choices."

The remedy, Whitacre said, is a "coherent, preemptive federal broadband policy" that allows SBC and others to compete under the same rules and investment incentives that apply to the dominant providers of broadband services.

By failing to correct the policy imbalance, Whitacre said "policymakers have put themselves in a tough spot. They may not be perceived as having picked the winner in the broadband race, but they could be viewed as having settled on a loser.

"For us to seize the opportunity to keep American consumers at the vanguard of the broadband revolution, policymakers must seize this moment and let the free market work freely," Whitacre said. "The only threat is in not taking action. A patchwork quilt of regulations that apply to only one competitor - the one that's a distant second to the market leader - will not produce the results this nation needs."

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