Cato Policy Analysis No. 423 February 4, 2002

Policy Analysis

The Digital Dirty Dozen
The Most Destructive High-Tech Legislative
Measures of the 107th Congress

by Wayne Crews and Adam Thierer

Wayne Crews is director of technology policy and Adam Thierer is director of telecommunications studies at the Cato Institute.


Executive Summary

The past year was a difficult one for the high-technology and telecommunications sectors of the U.S. economy. Massive layoffs, plunging stock prices, dismal earning reports, bankruptcies, and a host of other problems plagued this market. Market mania and the general economic downturn were primary causes of the tech sector's woes. Once bad times hit, overinflated tech stocks experienced a meteoric fall.

It is worth considering whether some of the tech sector's troubles can be linked to the uncertainty caused by the threat of increasing regulation. Whereas legislative attitudes in previous sessions of Congress were hands-off in nature, the year 2001 saw policymakers introduce hundreds of bills that deal with tech policy matters.

Although very few of those bills were actually passed, the tech sector finds itself at an important crossroads: Will policymakers follow a hands-off model that stresses humility and regulatory restraint when dealing with cyberspace, leaving most important decisions to market forces? Or will they revert to the command-and-control model that has long governed the telecom sector, with regulators molding the industry through endless intervention in order to satisfy a public interest that they themselves define?

As shown in this review of our picks for the 12 most destructive pieces of technology legislation introduced in the 107th Congress, there is good evidence that policymakers—whether through conscious design or not—are adopting the telecom regulatory paradigm for the tech sector. It appears that the tech sector may be pigeonholed into that paradigm simply because it offers a familiar set of rules and a bank of regulatory agencies that can be activated on command.

If that happens, it will be a grave blow to the Internet sector. Policymakers would be wise to reject this paradigm and instead let the Internet and cyberspace evolve with minimal federal intrusion and regulatory interference.

Full Text of Policy Analysis No. 423 (PDF, 32 pgs, 164 Kb)

© 2002 The Cato Institute
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