With the largest consumer market in the nation, an entrepreneurial spirit, and home to Silicon Valley, California should be a unique place for growth and innovation in telecommunications. In recent years, however, heavy regulatory burdens have stifled investment in the Golden State and brought telecommunications-related employment to near-1996 levels, even as employment rose in other sectors.

However, with the departure of two California Public Utilities Commission (PUC) members in January 2005, and the advancement of the California Performance Review recommendations in thecoming months, the Schwarzenegger administration has an unprecedented opportunity to shape the future of California telecommunications.

Recognizing the host of challenges in Sacramento, and changes in the federal government, the following are policy ideas lawmakers could embrace to rescue the telecommunications industry. The Pacific Research Institute offers Governor Schwarzenegger and state legislators three realistic agendas to:

• Reform the UNE-P regime
• Repeal the consumer bill
• Restrict CPUC authority