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Press Release -- February 11th, 2010
Source: Cbeyond
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Study Proves Telecom Regulation Changes Could Spur Small Business Job Creation and Broadband Investment

Study Proves Telecom Regulation Changes Could Spur Small Business Job Creation and Broadband Investment

Cbeyond CEO Jim Geiger calls for adoption of "cashless stimulus" to drive job growth and investment in the small business community.

ATLANTA (February 11, 2010) - Sensible changes to federal telecommunications regulations would generate hundreds of thousands of jobs along with more than $20 billion in broadband investment, a study from a prominent Boston econometrics firm shows.

The report, "Regulation, Investment and Jobs,"; by Economics and Technology Inc. traces how regulatory changes in the early years of the last decade gave Verizon, Qwest and AT&T free reign in the broadband market. These changes led to a near collapse of competitive alternatives which, in turn, freed the Bell monopolies to make radical cuts in jobs and infrastructure investment. Those reductions rebounded only slightly when cable companies posed serious competition for residential Internet customers several years ago, but investment remains depressed to this day.

Investment in business broadband services, the study shows, will continue to lag unless the Federal Communications Commission makes some simple changes in federal regulation. Such changes would reignite telecom investment, giving the most innovative companies access to the bandwidth needed for the next generation of productivity-enhancing applications for their small business customers.

"Small businesses are the beating heart of the United States' economy," Cbeyond CEO Jim Geiger said. "They employ more than half of the U.S. workforce and have created 93% of our new jobs over the last 20 years. Despite this, current federal regulations give the Bells a high-bandwidth monopoly for small business services. ETI's new report demonstrates conclusively that this is stifling the investment and innovation we need to get our economy off the shoulder and back into the fast lane.

"U.S. broadband competitiveness has fallen far from what it once was. Many reports put a dozen or more countries ahead of us in the deployment of technology that we invented," Geiger continued. "Now, our economy is lagging, deficits are soaring and unemployment is at historic levels. It's time to take the steps necessary to spur investment, create jobs and recapture our lead in broadband technology, and we have suggested a way to make this happen without additional government spending."

Cbeyond has called on the FCC to require the Bell monopolies to sell - at retail prices - the bandwidth necessary for competitors to provide next generation broadband applications to small businesses. "If the FCC adopts our proposal," Geiger said, "telecom innovators like Cbeyond will gain access to the bandwidth they need to push new applications to small businesses. This way, the Bell companies can sell more bandwidth at the same prices they charge to any other customer. This is a solution where everybody wins: a 'cashless stimulus' to the most important sector of our economy, small business."

Report sponsors Public Knowledge, Cbeyond, Covad Communications, Integra Telecom, PAETEC, and tw telecom will present the report as part of a submission to the FCC on Feb. 12. A copy of the report is attached.

About Cbeyond
Cbeyond, Inc. (NASDAQ:CBEY, news, filings) is a leading provider of IT and communications services to more than 48,000 small businesses throughout the United States. Recently named as the sixth fastest growing technology company by Forbes magazine, and added to Standard & Poor's Small Cap S&P 600 Index, Cbeyond offers more than 30 productivity-enhancing applications including local and long-distance voice, broadband Internet, mobile, BlackBerry
®, broadband laptop access, voicemail, email, web hosting, fax-to-email, data backup, file-sharing and virtual private networking. Cbeyond delivers these services over a 100 percent private all IP network. For more information on Cbeyond, visit www.cbeyond.net.

CONTACT:
Shana Keith
678-384-8304
shana.keith@cbeyond.net

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