Birth of the Digital New Deal: An Inventory of High‐​Tech Pork‐​Barrel Spending

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Congressional spending sprees are nothingnew in Washington. But now, new spending initiativesare cropping up that cover telecommunicationsservices, the Internet, and the high technologysector in general. Although federal legislativeactivity on this front is not a formally unifiedeffort, the combined effect is tantamount to thecreation of what might be called a "Digital NewDeal." Just as policymakers proposed a litany ofNew Deal programs and spending initiativesduring the Great Depression era, lawmakerstoday are devising many new federal programsaimed at solving the supposed emergencies ordisasters that will befall the telecommunicationsindustry without government assistance. Therecent troubles of the dot-com and telecommunicationssectors have only added fuel to the fireof interventionism.

The new communications, cyberspace, andInternet-related spending initiatives that policy-makersare considering or have already implementedcan be grouped into four general categories:(1) broadband deployment; (2) digitaleducation, civic participation, and cultural initiatives;(3) cybersecurity; and (4) research anddevelopment. Dozens of new federal programshave been proposed in these areas during the107th Congress. And dozens of other assistanceprograms already exist.

The dangers of the cyber-pork barrel shouldbe obvious. Washington subsidy and entitlementprograms typically have a never-ending lifespanand often open the door to increased federal regulatoryintervention. That kind of political meddlingcould also displace private-sector investmentefforts or result in technological favoritismby promoting one set of technologies orproviders over another. Moreover, subsidy programsare unnecessary in an environment oftechnological competition, characterized byboth proliferating consumer choices and uncertainmarket demand for new services. Finally,perhaps the leading argument against the creationof a Digital New Deal is that by inviting thefeds to act as a market facilitator, the industryruns the risk of becoming more politicized overtime.

Before high-tech sector leaders become toocomfortable in Washington circles, they shouldask themselves if they want their future to be soclosely tied to the whims of federal legislatorsand regulators.

Adam D. Thierer and Thomas Pearson

Adam Thierer is director of telecommunications studies, Clyde Wayne Crews Jr. is director of technology studies, and Thomas Pearson is a research assistant at the Cato Institute.