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where, whether rural or urban, at home or in a call center, in the United States or overseas. If we expect all of our citizens and companies to be competitive, universal availability of affordable broadband should be a matter of national policy.

Some of the programs and policies already being pursued in the United States, such as federal R&D funding and accelerated tax depreciation on equipment purchases, do cost the federal government money in terms of outlays and forgone direct revenue. However, the committee believes that the most important needed changes are in the regulatory and spectrum management areas. Policy changes in both of these areas have a broad impact on the incentives of private companies to invest in infrastructure and to develop competitive services. Recent examples of regulatory changes include Federal Communications Commission decisions to free newly deployed broadband infrastructure from legacy regulation and to develop a framework for deployment of Broadband over Power Lines (BPL). These sorts of regulatory changes do not entail financial investments by the federal government. The future of spectrum management is another particularly critical area.48 And, as is the case with regulatory policy, changes in spectrum policy would not necessarily entail costs to the federal government and might even result in additional revenue.

CONCLUSION

The United States, if it is to ensure the continued high standard of living and security of its citizens, must maintain its position as the world’s premier place for innovation, for investment in downstream activities such as manufacturing and marketing, and for creation of high-paying jobs. We can do this if, while implementing the other recommendations made herein, we modernize the patent system, realign tax policies to encourage innovation, and ensure the nation meets the goal of affordable broadband Internet access for all. The committee could not examine every possibility, but appropriate policy changes should be pursued in each of these areas. A comprehensive comparative analysis of tax rules, conducted by the Council of Economic Advisers and the Congressional Budget Office, could elucidate how we stack up against other nations as a location for innovation and related follow-on activities. The object of that examination and the adoption of the recommendations in this chapter would be to ensure that the United States provides the innovation-friendly environment needed to remain a highly attractive place to invest in the future.

48

See US Department of Commerce. Spectrum Policy for the 21st Century: The President’s Spectrum Policy Initiative. Report 1. Washington, DC: US Department of Commerce, June 2004. Available at: http://www.ntia.doc.gov/reports/specpolini/presspecpolini_report1_06242004.htm.



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