TechKnowledge No. 35

Just Don’t Do It: The Digital Opportunities Investment Trust (DO IT) Fund

By Adam D. Thierer and Clyde Wayne Crews Jr.
May 6, 2002

Must the government establish what amounts to a new Public Broadcasting System for the Internet, funded by the billions of dollars in revenues forthcoming from the sale of broadcast spectrum? Is this a proposal upon which free speech, our cultural heritage, and the education of our children depend? Some seem to think so. But a better idea is to simply return those billions of dollars to taxpayers so that they might choose their own programming and decide for themselves what educational or cultural initiatives to fund.

Here we go again. The history of communications and broadcast industry regulation is littered with silly crusades undertaken in the name of serving the “public interest.” While eluding definition for decades, this amorphous concept has spawned innumerable policy directives and spending initiatives. Much like pornography, omniscient members of Congress and their benevolent bureaucratic brethren at the Federal Communications Commission always seem to know the public interest when they see it. But since the public interest is whatever they say it is, it’s a splendidly convenient (if not a tad bit circular) concept by which to manage one of the biggest sectors of the U.S. economy.

Now comes the latest grand public interest scheme: the Digital Opportunity Investment Trust fund program, or “DO IT.” DO IT is the brainchild of two former PBS and FCC chairmen who established the Digital Promise project to “halt the encroachment of purely marketplace values upon the missions of our public service institutions” The Digital Promise websites proposes that “the Trust should commission the development of online courses, training materials, archives, software, civic information, quality arts and cultural programs, and other digital resources and services of the highest standards to meet the needs of all citizens and help them gain access to the best minds and talents in our society.”

This proposal is really just old wine in a new bottle. DO IT might best be thought of as the fusion of the National Endowment for the Arts, PBS, and the “E-Rate” program (or “Gore Tax” as it is called by some). DO IT supporters have learned seemingly nothing from the heated debates over the public funding of controversial programs such as these. In fact, this concept has quickly won the support of many academics and even high-tech heavyweights like RealNetworks, 3Com, eBay, and George Lucas. (Apparently no one has asked those parties if they’ve considered putting their own money on the line instead of merely endorsing another mandated public charity program.)

Congress has taken the bait too. Rep. Ed Markey (D-Mass.), sponsor of the Wireless Technology Investment and Digital Dividends Act, has proposed a Digital Dividends Trust Fund. The bill, and one apparently forthcoming from Sen. Christopher Dodd (D-Conn.), proposes to use a portion of broadcast spectrum auction revenues scheduled to be freed up as part of the train wreck called the digital television transition to fund a variety of “public interest” projects or entities deemed worthy by a board of eight trustees. In theory, the government will get the chance to auction a large chunk of the spectrum currently dedicated to analog TV if the broadcast community can be coaxed or forced to move all their signals to the digital channels granted them as part of a scandalous give-away back in 1996. If this scheme works, the stakes could be enormous, since tens or potentially even hundreds of billions of dollars could flow into federal coffers.

Eyeing the pot of gold at the end of the spectrum rainbow is an all-too-eager-to-spread-the-wealth Congress. Rep. Markey’s Digital Dividends Trust Fund would use a significant chunk of the auction proceeds to spread the pork around in assorted ways that mirror the DO IT proposal: teacher and librarian training; R & D programs for “sophisticated content-related educational software and programming designed to enhance learning” in schools and libraries; technology projects undertaken by AmeriCorps and the Corporation for National Service; worker retraining programs; after-school programs and computer literacy initiatives; subsidies to public broadcasters to help them convert their stations to digital TV; rural broadband subsidies; and the list goes on.

The private sector is already busy providing such offerings, from rapidly updated and competitive educational software offerings to web-based libraries to broadband rollout. Americans can avail themselves of such materials and services all the better if Congress returns the proceeds of spectrum auctions to taxpayers and lets families “DO IT” themselves. While the release of the Markey bill and the Digital Promise initiative garner today’s attention, this effort is part of a much larger agenda shared by a variety of groups and individuals who are seeking to advance an overtly collectivist agenda for cyberspace and the electromagnetic spectrum. Their lingo consists of catchy phrases like “public spaces on the Net,” a “spectrum commons,” and “shared public assets,” but in the end, it’s just more socialist snake oil that rejects free markets and consumer choice.

Recent conferences at the New America Foundation featured a host of panelists articulating even more ideas on establishing an “information commons,” as if such a thing is automatically or inherently superior to an information marketplace, consisting of the proprietary information sources that already exist. The public spaces or information commons movement draws energy from the flawed premise that capitalism and freedom are inimical to civil society and the diffusion of ideas, and that something else-something governmental-is required if we’re all to be enlightened (somewhat left-leaning?) citizens. Yet a marketplace is a prerequisite for freedom and tolerance in ideas, not something that must be countered by a new PBS for the Net. America established a First Amendment precisely because governments can threaten these values. Markets, not auction revenues funneled to pet political projects, will be the source of tomorrow’s significant and useful “public” information. The “public spaces” movement’s enshrinement of a political rather than civil view of the foundation of a genuine “information commons” is misguided.

In the end, the Digital Promise DO IT proposal will simply deteriorate into regulatory transfers and the funding of “approved” information or information nobody wants. (If people want it, government need not fund it through coercion). Our heritage of freedom of speech has given us “public spaces”-movies, bookstores, websites, archives, civic programming-not just worthy of the name, but that people want to pay for. We don’t need a Ministry of Cyber Culture to decide these things for us.

Adam Thierer (athierer [at] cato [dot] org) ) is the Director of Telecommunications Studies and Clyde Wayne Crews Jr. (wcrews [at] cato [dot] org) is the Director of Technology 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.