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USIIA Raps U.S. Tech Policy

Despite the recent surge in economic growth and declining unemployment rates, the effects of the recovery are not yet being felt in the Internet industry according to the U.S. Internet Industry Association (USIIA), a national trade association for Internet commerce, content and connectivity.

The group places the blame squarely on the "incoherent, inconsistent and conflicting" technology policy of the government.

According to the Bureau of Labor Statistics (BLS), non-farm employment rose by 126,000 in October, roughly the same increase as in September. But manufacturing jobs fell 24,000 that month, lead by yet another decline in computer and electronic related manufacturing. The tech industry lost 6,600 of these jobs, including 2,300 for computer equipment, 700 for communications equipment, 4,100 for semiconductors and 200 for electronic instruments.

The service side of the industry did not fare much better. Jobs in the services sector of the IT industry fell by 8,000 from the previous month, led by a decline of 3,400 jobs for telecommunications services.

"The Internet industry, which once led the economy and set new levels of productivity for the nation, is stagnant," says USIIA President Dave McClure. "And with new taxes looming for Internet access and services, the situation is likely to become much worse in coming months."

The five-year ban on Internet access taxes expired on Nov. 1. The U.S. House of Representatives has passed legislation to permanently ban taxes on Internet connections with an expanded definition of access to include broadband, which some states are taxing as a telecommunications service. The Senate, however, has been unable to agree on the access definitions and wants to make the ban temporary.

McClure claims the federal policies created by Congress and the Federal Communications Commission (FCC) have failed to streamline the regulatory process to spur investment and create growth. In a statement issued Thursday, the USIIA said the government's policies have "done little to address the needs for regulatory parity, deregulation, consistent policies for wireless spectrum allocation and use, development of Internet technologies or incentives for investment in the Internet infrastructure."

The USIIA cites as example the recent FCC decision to begin to address the issue of regulation of voice over IP (VoIP), but will have no policy for at least a year. The group is also critical of Congress' inability to produce a national policy for broadband and its failure to pass legislation making spam illegal.

"We have the ability to craft an Internet infrastructure that will bring growth, jobs and $500 billion in new revenues to the U.S. economy," says McClure. "But we can't do it with today's policies. We need a national policy for the Internet that is fair, with minimal barriers to investment, and that addresses the critical and pressing issues that are hampering our ability to survive and thrive."