The Bush Administration’s Broadband Policy Record

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Almost two years into its term, it is difficult to draw anydefinitive conclusions about the Bush Administration's broadbandpolicy record for a simple reason: there isn't much of one.Although the administration has supported a handful of minortechnology initiatives, its first 20 months have been characterizedby a lot of talk but very little action.

Of course, it should be noted that technology policy in generalwas never going to be a top priority of this administration. Thecurrent team came into office with other concerns (i.e., education,Social Security, and tax reform), and after September 11, 2001,combating terrorism became an all-consuming task. Although thosegoals are laudable, their execution remains riddled with problems.Moreover, in the wake of the Enron and WorldCom fiascos, the WhiteHouse is likely to be concerned about seeming too close to industryin general and has gradually disengaged from specific regulatorypolicy debates.

Nonetheless, as the tech and telecom meltdown lead the broadereconomy into a recession, the administration's lack of leadershiphas been surprising. The administration's response to thisaccusation could be two-fold. On one hand, they might argue thatthe current telecom downturn has more to do with market factorsthan regulatory causes and that there is, therefore, little or no"leadership" role for the government to play.

That would be a weak argument, given that we're not startingwith a blank slate. The telecom sector remains one of the mostheavily regulated segments of the American economy. As Greg Sidakof the American Enterprise Institute has pointed out in aneye-opening new study, the past six years have seen a steady increase inregulatory spending and rulemaking at the Federal CommunicationsCommission as agency spending has risen 37 percent and the numberof pages in the FCC Record has tripled in the wake of the supposedderegulatory Telecommunications Act of 1996. To make matters worse,the number of telecom lawyers-as measured by membership in theFederal Communications Bar Association-grew by 73 percent in thelate 1990s.

There is no denying that those statistics illustrate a continuedand growing role for regulators in the telecom sector. And unlessthe Bush administration is prepared to make an argument that thisincreased regulatory activity is beneficial to this sector and thebroader economy, the only logical conclusion is that somethingneeds to be done to address the growing regulatory burden theindustry faces. In fact, Jeff Eisenach, president of the Progressand Freedom Foundation, has argued that the administration's "no policy is good policy"approach to this problem threatens to delay the recovery. "The Bushadministration's actions will determine how quickly the tech sectorgets back on its feet," Eisenach argues, but he fears that no oneappears to be listening.

To counter that accusation, the administration would likelyacknowledge that there is a public policy problem but claim to beaddressing it. As proof of their leadership, they would likely citea handful of speeches or other statements such as the June 13release of the president's long-awaited technology agenda, entitledPromoting Innovation and Competitiveness. Regrettably, that agendais long on rhetoric and short on substance. To be fair, the Bushtech agenda does outline some objectives or accomplishments thatare important to the high-tech sector, including tax relief,modernization of technology export controls, new trade promotionauthority, accelerated depreciation schedules for capitalinvestment, and the extension of the moratorium on Internet accesstaxes. But although these priorities might have some tangentialimpact on industry recovery, the administration appears to bedancing around the much more important issue of how the telecomsector and broadband technologies will be governed in the future.On this matter the administration's technology agenda is largelysilent.

Instead, industry leaders who had hoped the administration wouldarticulate a clear and bold agenda for reform have instead beenoffered a continued string of platitudes about the importance ofbroadband. "This country must be aggressive about the expansion ofbroadband; we have to," notedBush when announcing the agenda. And in a February 21 speech to tech leaders in San Jose, California, Vice PresidentRichard Cheney told the crowd, "As this technology progresses,we're committed to keeping America the world's leader in developingnew broadband technology and applications." Well that's all verynice, but to borrow Wendy's advertising slogan from the 80s,"Where'sthe beef?" The administration's broadband policy is tantamountto a "no-risknon-policy" in the words of Competitive Enterprise Institutesenior fellow James DeLong. Apparently taking a page out of the oldBill Clinton playbook, the Bush crew seems to think that if theysay they "feel our (broadband) pain" enough, we'll think thatcounts as legitimate leadership.

The vacuous rhetoric and the leadership vacuum at the top mustbe getting awfully embarrassing for those people throughout theadministration who really understand what's at stake, especiallyFCC chairman Michael Powell. Powell has set forth some fairly boldpolicy initiatives that have big-government types inside theBeltway apoplectic. Some of theproposals could radically alter the face of moderntelecommunications policy for the better but are encountering stiffresistance from the typical cast of characters in industry and onCapitol Hill who consistently oppose any form of telecomreform.

What's worse is that Powell's reform agenda is now also beingopposed by forces within other independent regulatory agencies. Forexample, the Small Business Administration's Office of Advocacysent Powell aletter on August 27 informing him that it opposed the currentFCC liberalization efforts on the grounds that it might hurt smallInternet service providers. In addition, earlier this year, theGeneral Services Administration filed comments with the FCCnotifying Powell that they did not agree with the deregulatorythrust of his telecom policies. Apparently officials at the SBA andGSA think the answer to America's telecom and broadband problems ismore regulation, not less.

Here's where genuine leadership is needed from high up in theBush administration. The president should invite Powell to theWhite House, stand next to him on the podium, and declare hisacross-the-board support for the deregulatory proposals that Powellhas been willing to put on the FCC's agenda. With hostile forces onCapitol Hill, throughout industry, and even within his ownadministration threatening to derail this agenda, Powell has likelybeen wary of proceeding without some substantive show of supportfrom at least his boss. And so the question remains: Will PresidentBush leave Chairman Powell hanging in the wind, or will he getbehind the long overdue effort to liberalize the telecommarketplace?