TechKnowledge No. 81

Is the Bush Administration Finally Getting Serious about Broadband Policy?

By Adam D. Thierer
April 28, 2004

For the past three and a half years, high-tech sector officials and watchers have been patiently waiting and wondering if the Bush administration was ever going to formulate a serious broadband policy. Early speeches or announcements on the subject were quite ambiguous and generally characterized by plenty of talk about the importance of a broadband future, but contained very little in the way of action items. In a speech this week in Minneapolis, however, President Bush finally decided to get a little more specific about his vision for this sector.

Better Late Than Never. One wonders why it took the White House so long to come up with a concrete plan, but elections (sometimes) have a way of forcing candidates to better define themselves in effort to gain voter allegiance. Not that technical telecom and broadband policy matters are likely to win many votes, but their importance to the overall economy is nonetheless clear and that makes what the candidates say on these arcane issues important. What exactly does President Bush propose for broadband? His speech and a corresponding press release contain a few important agenda items worth noting.

* Better Access to Federal Lands: First, he proposes increasing access to federal lands for the purposes of laying more fiber optic cables or the placement of wireless transmission towers. That certainly can’t hurt broadband deployment, but access to state and local lands is the real problem is here. Local rights-of-way issues and wireless tower siting issues have long plagued this sector, but Bush’s plan only addresses access to federal lands since that’s the only thing over which he has clear jurisdiction. It would be very difficult-and probably constitutionally impermissible-for the federal government to preempt state and local authority over their rights-of-way or tower-siting decisions. Conclusion: Bush deserves credit for trying to ease government-imposed burdens on broadband deployment, but there’s likely little he can do about the real impediments to deployment at the state or local level.

* Pushing Emerging Broadband Alterntives: Second, Bush stressed the importance of making the policy reforms necessary to encourage emerging broadband technologies, especially broadband over powerlines (BPL) and new wireless networks and applications. On the wireless front, Bush stressed the steps that his administration has already taken to open up more spectrum for private bidding for next generation wireless services as well as the spectrum set aside for unlicensed wireless broadband applications such as Wi-Fi and Wi-Max. He also stresses ongoing efforts by the Department of Commerce to improve spectrum management overall. Conclusion: On each of these agenda items Bush deserves praise for pushing alternative broadband connections for home and business. Even bolder reforms could be pursued on the spectrum front, but the FCC and Commerce Department deserve a great deal of credit for the important strides they have taken in recent years to liberalize the spectrum.

* Banning Internet Access Taxes: Third, Bush reiterated his support for a permanent ban on state and local efforts to tax broadband access. His timing was important because as he delivered his remarks the Senate was poised to finally give floor consideration to the extension of the Internet Tax Freedom Act, which contains a moratorium on such taxes but expired last fall. Conclusion: Bush deserves credit for once again making it clear that state and local governments shouldn’t be allowed to convert the Internet into another cash cow to be milked for billions of tax dollars.

* Standing by His Man at the FCC: Fourth, and most importantly, the president’s speech made a specific point of mentioning that “we’re going to continue to support the Federal Communications Commission” and “Chairman Michael Powell’s … decision to eliminate burdensome regulations on new broadband networks availability to homes.” “In other words,” he continued, “clearing out the underbrush of regulation, and we’ll get the spread of broadband technology, and America will be better for it.” In particular, the press release the White House released after the speech also singled out the FCC’s decision, pushed strongly by Chairman Powell, to free new fiber-to-the-home investments from traditional telecom regulations, especially the infrastructure-sharing provisions of the Telecommunications Act of 1996. The press release states, “Deregulating new ultra-fast broadband infrastructure to the home removes a significant barrier to new capital investments.” Conclusion: Amen brother! Now why weren’t you saying this two or three years ago when Powell was pursuing this reform agenda at the FCC against significant opposition? But again, better late than never. With any luck President Bush will continue to stand by Powell and his bold liberalization agenda for broadband and telecommunications.

Will This Be the End of It? President Bush deserves some credit for finally getting at least a little more serious about broadband and Internet policy. However, one hopes this is not the end of it but just the beginning. While broadband reform will never make for a good stump speech or a bumper sticker slogan, it is still vitally important to the future of our Information Age economy.

There are signs that the Democratic presidential candidate Sen. John Kerry (D-MA) will be staking out his own broadband agenda in coming weeks and months, so there may be more to come. Kerry will likely support many of the same reform proposals Bush outlined this week but go further in terms of pushing a more activist role for Washington as promoter and subsidizer of broadband to the masses. This is where the Bush team will face a decisive moment of truth: Do they want to follow suit and just get in a broadband spending war with Kerry, or will President Bush make an effort to prove that the Republican Party really can be the party of smaller government by proposing the comprehensive deregulation of communications and broadband?

There were moments during President Bush’s recent speech and press release where he sounded like a Democrat in calling for “universal broadband” coverage by 2007, which is probably not possible anyway since not every American wants or needs broadband in the home. And Bush also talks up the idea that broadband technology must be affordable “to make sure it gets spread to all corners of the country.” Well, what if it isn’t? After all, it’s not exactly cheap to deploy expensive high-speed networks coast-to-coast. If prices don’t fall below $40 per month, should government impose price controls? Let’s hope Bush is just being a politician here and not really advocating a command-and-control regime for broadband. Indeed, perhaps the most heartening moment in his speech came when he noted that the “proper role for the government is to clear regulatory hurdles so those who are going to make investments do so.” “Broadband is going to spread,” he continued, “because it’s going to make sense for private sector companies to spread it so long as the regulatory burden is reduced-in other words, so long as policy at the government level encourages people to invest” instead of discouraging investment.

Here’s hoping that the president sticks to his guns on that promise.

Adam Thierer (athierer [at] cato [dot] org) is the director of telecommunications studies at the Cato Institute in Washington, D.C. To subscribe, or see a list of all previous TechKnowledge articles, visit www.cato.org/tech/tk-index.html.