The *NEW* Frank Coluccio Technology Forum Message Board

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Technology Stocks : The *NEW* Frank Coluccio Technology Forum

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To: Frank A. Coluccio who wrote (4003)	9/28/2001 12:44:28 PM
From: elmatador	Read Replies (1) of 46821

"To stimulate investment in telecommunications, the FCC also could deregulate depreciation schedules for the telcos. Telcos should be able to write down their investments as fast as they want to, but no one in state government is interested in this, because state governments want to keep prices down. Depreciation is an expense. If it were increased, the rates the telcos are allowed to charge customers—rates based on the telcos’ costs—would go up. So state regulators have kept depreciation schedules slow and depreciation amounts low. If this were changed, it would make a huge difference. Prices might go up by a modest amount, but in my opinion prices should be set by competition, not by regulators. The important thing is that more realistic depreciation schedules would unleash billions of dollars of investment. To do this, the FCC should lean on the states. If you’re into federalism, you don’t want to do that. If you’re into proinvestment competitive policies coupled with deregulation, it’s the right thing to do." mckinseyquarterly.com

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