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Senator: Federal Overregulation Causing Businesses to ‘Withdraw from Urban Areas’

WASHINGTON – An overreach of federal regulation is causing companies to “withdraw from urban areas,” according to Sen. Thom Tillis (R-N.C.).

“One thing we need to recognize is that an overreach of regulation has a disproportionate impact on smaller businesses and has the direct impact of withdraw from urban areas. You’ve seen that with community banks. You’ve seen that with community hospitals because the regulatory burden reaches a point where they have to get economies of scale and that only comes through consolidation, and when you consolidate you typically pull back,” Tillis said during a recent Bipartisan Policy Center discussion, “The Appalachia Initiative: Bipartisan Approach for the 21st Century.”

“A part of what we need to do is understand it’s not regulatory reform for regulatory reform’s sake, but it’s understanding the disproportionate impact on the more challenged communities – and they are the ones that the businesses presences tend to exit first in favor of consolidating to the point where they have an effective business model.”

The Bipartisan Policy Center’s Appalachia Initiative will “chart a bipartisan approach to increase jobs and prosperity for the Appalachian region,” according to the group’s website.

Sen. David Perdue (R-Ga.) said the federal government has to help “facilitate” access to capital for young entrepreneurs, specifically.

“I think there’s an opportunity for us to help them streamline how we make that available to them,” he said.

Sen. Mark Warner (D-Va.) agreed that access to capital is a problem in Appalachia and other areas.

“We do need community bank, regional bank reg reform. We have seen a lot of the business-lending shift from the major enterprise money-centered banks. They don’t do small-business lending anymore. It really is the community-based banks,” he said.

Warner called for a more “forward-leaning” policy from the federal government on the expansion of broadband connectivity to help Appalachia.

He suggested that the Federal Communication Commission include broadband “coverage guarantees” with providers as a part of net neutrality.

“I don’t think we can underestimate the need for broadband. It is remarkable how often I hear, not just in southwest Virginia or Appalachia but all over the state, broadband is not going to guarantee your success, but if you don’t have it you are not even in the game,” Warner said.

“And we are going to need, as somebody who eked out a living with cell phones, we’re going to need a more forward-leaning policy because we’re not going to be able to wire down to every house and every holler across Appalachia,” he added. “So that last mile on wireless, I think we need a much more proactive policy from the FCC in effect trading more readily available spectrum for those enterprises that will guarantee full build-out of broadband.”

Sen. Joe Manchin (D-W.Va.) said the FCC’s original mapping for expanding mobile voice and broadband connectivity in rural areas was “absolutely atrocious.”

“It was not accurate. At the time, I brought one of the FCC people to West Virginia and their map was showing that we had coverage. I brought him into an area of our state and said, ‘Go ahead, make a phone call.’ I said, ‘Go ahead, use any service you want, just make a phone call.’ He couldn’t get out and I said, ‘Look at your map,’” Manchin said. “So it was brought to his attention that we had to do something and we need to start changing that.”