Springfield, Ill., March 16, 2010 – A study conducted by the Discovery Institute on the impact of telecommunications policy on job creation and investment in Illinois found that updates to the Illinois Telecommunications Act are necessary to sustain investment in broadband which, according to one estimate, would create or save 105,622 jobs.

The study cited that with just a 7 percent increase in broadband penetration in Illinois, the state would experience an estimated $6.2 billion in economic impact annually from increased broadband availability, $28 million in average health care savings and more than $4 billion in direct annual income growth.

Results were released today by the Illinois Technology Partnership (ITP), the Illinois State Black Chamber of Commerce and the Illinois Hispanic Chamber of Commerce (ILHCC). 

Initially drafted in 1985, the Telecommunications Act has not been updated since 2001 – before widespread broadband and mobile adoption occurred.  These 25-year old, legacy regulations force investment in outdated infrastructure – instead of promoting investment in new technologies like wireless and broadband that most consumers prefer.

“The Illinois Telecom Act expires this year.  By making simple reforms to outdated laws, Illinois can spur innovation and revival based on new technologies and services,” said George Gilder, senior fellow at the Discovery Institute. “Illinois cannot afford to ignore these old laws – they need to change them right away.” 

Harmful regulations that remain in the Illinois Telecommunications Act include pricing regulation, filing requirements, obligations to serve and the application of utility jurisdiction to some competitors but not others.

“The telecommunications landscape is changing, and the rationale for many of the regulations written in 1985 no longer exists thanks to advancements in new technologies that lower costs and give consumers more access to cutting-edge technologies at affordable prices,” said Lindsay Mosher, executive director of ITP.  “By revamping the Telecommunications Act, we can keep companies and jobs in Illinois.”

Today, people are watching YouTube videos over their wireless phones, companies and consumers are using Voice over IP telephone lines, and businesses that were once considered local are expanding their reach nationally and internationally through Internet e-commerce.

“The days of the telephone monopoly are long gone, and leaving outdated laws on the books distorts the competitive environment in Illinois,” said Hance Haney, director and senior fellow at the Discovery Institute.  “New technologies have changed the telecommunications landscape, and leaving the old rules in place harms consumers and Illinois’ opportunities for retaining and creating jobs.”

The study cites Hispanic adults and non-Hispanic black adults are more likely than white adults to be living in households that are wireless only and mobile wireless adoption is highest among blacks.

“New technologies have been important in making strides toward achieving digital equality stemming from the high cost of home Internet, but Illinois needs to do more,” said Larry Ivory, president of the Illinois State Black Chamber of Commerce. “Updating the Illinois Telecommunications Act will encourage investment in broadband infrastructure, which will give more communities access to high-speed Internet and help lower the cost barrier to adoption.”

According to the study, in areas that have broadband access, economists have found property values are higher and there are more jobs and businesses, particularly in smaller, more rural and economically distressed areas.  The study also concluded that investment in broadband infrastructure will be quickly realized and most profoundly felt in underserved communities, many of which are African American and Hispanic communities.

“Broadband access is no longer a luxury, it a necessity for employment, education and health care,” said Omar Duque, president of the ILHCC. “We need to make sure our policies are encouraging investment in this important infrastructure so residents in every community are afforded the same access and equal opportunity.”

Illinois’ telecommunications policies need to be updated to better reflect today’s technology landscape.  Harmful regulations that are hindering growth within the technology sector need to be removed.  If they are not, Illinois will continue to lose jobs to neighboring states such as Michigan, Indiana, Missouri and Kentucky where policies have been updated to encourage new and emerging technologies that give companies a competitive edge and consumers more choice. 

This study was sponsored by the Illinois Technology Partnership, the Illinois State Black Chamber of Commerce and the Illinois Hispanic Chamber of Commerce and paid for by members of ITP’s Advisory Board.  For more information and to review the full results of the study, visit iltechpartner.org.

Click here to see the entire study: ITP_ILBCC_ILHCC Study

Click here to see a summary of the study: Study Fact Sheet

Click here to see highlights on the impact of broadband on minority communities: Minority Fact Sheet

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