Regulation Better for Investment and Small Business ... Really?

Is more regulation really good for private-sector investment and for small businesses?

That's the assertion made in a recent report sponsored by Public Knowledge, Cbeyond, Covad Communications, Integra Telecom and tw telecom.

There are many questions about this study, however.

For example, the underlying assumption is that broadband investment will be spurred by expanded government regulation mandating resale of broadband networks to competitors. To the contrary, however, it's obvious that this would dramatically alter economic incentives and diminish investment in existing and competing networks.

In addition, this report relies on the argument that during a period of a higher level of regulation (defined as 1996 to 2001) investment was up, and during a period of reduced regulation (2002 to 2007), disinvestment occurred. This analysis and breakdown falters on a few fronts...

Read the rest of this SBE Council Cybercolumn by chief economist Raymond J.Keating here.