Regulation

Today, the Institute for Policy Innovation (IPI) filed comments with the Federal Communications Commission (FCC) in support of the FCC’s 5.9 GHz proceeding.

If you’re into that sort of thing, that’s all you need to know. If you have no idea what that is about, the rest of this is for you.

Spectrum is a limited resources, and these days is in more demand than ever. Broadcast TV and radio, wireless phones, Wi-Fi, baby monitors, home security devices, first responder communications, military and satellite applications—and scores more things all use wireless spectrum. And because there seems no end of demand for spectrum, policymakers have recognized that it could get crowded.

That’s why the FCC has for years been identifying bands of unused and underused spectrum so that it could be repurposed for more efficient use. Oh, and because it is auctioned off, that’s more revenue for the federal government.

In recent years spectrum belonging to television broadcasters and satellite companies has been auctioned and repurposed to obtain more spectrum for wireless phones.

But it turns out, the biggest hoarder of unused and underused spectrum is the federal government itself. Many agencies have been allocated spectrum, and much of this spectrum has been left idle or underused for decades. A lot, but not all, has been reserved by the military, and eventually some of that is going to have to be clawed back as well.

In 1999 a block of spectrum was allocated to the Department of Transportation (DOT) to be used for future smart cars to be able to talk with each other, with the goal of increased public safety. The DOT came up with a plan called Dedicated Short-Range Communications (DSRC) for cars to communicate with each other and coordinate with each other.

Well, fine. Except that for the last 20 years, almost nothing has been done with this important band of spectrum. Meanwhile, it has become clear that autonomous vehicles aren’t going to be safer because they are dependent on communications with all the other vehicles around them – they are going to be safer because they are autonomous and independent. Creating a system of dependencies just doesn’t make sense—it probably makes such cars more vulnerable in that it could create a false sense of security.

So the FCC essentially wants to take part of the 5.9 GHz spectrum away from the DOT. Can you predict how the DOT might respond to such a request?

Yeah, you’re right. Huge, ugly turf battle between Elaine Chao (Sec. of Transportation) and Ajit Pai (Chairman of FCC). Except that the FCC has final say over such things.

The best use of the 5.9 GHz spectrum is to leave a little bit of it with DOT and see if they come up with something useful to do with it, while making most of it available for more efficient uses. And that is what the FCC’s proceeding is about, and it’s why IPI filed comments today in support of the FCC’s proceeding.

Eight months after instituting a $15 an hour minimum wage hike, New York City employers and workers are feeling the pinch. Reports show business operators are cutting staff, cutting hours, and even raising prices. 

This is no surprise.

During the 86^th Texas Legislature, which took place from January to May, 2019, legislators passed a really stupid, transparently awful bill. Governor Abbott signed it. Now the state is being predictably sued.

IPI warned them. The Trump administration Justice Dept. warned them. They passed it anyway.

And I mean, they REALLY passed it. It passed the Texas House 141 to 5, and it passed the Texas Senate 31 to 0.

It still boggles my mind that a piece of legislation with such obvious flaws sailed through the legislature with hardly any notice. But now the chickens are coming home to roost, and Texas taxpayers are going to be paying for the state to defend the indefensible in a likely losing cause.

I thought I was already cynical enough. I guess I was wrong.

Over the years I’ve seen elected Republican politicians telling voters about how strongly they stood for “free-market principles” and then vote in ways that are completely contrary to those principles. I’ve seen it so many times that I didn’t think I could be surprised.

But I was wrong.

New legislation before the Texas legislature wrongly assumes that private sector use of eminent domain is more problematic than government use.

In his March 4 testimony before the Texas state affairs committee regarding SB 421, IPI president Tom Giovanetti pointed out the troubling assumption underlying the bill—that there is something wrong or potentially abusive about allowing the private sector to use eminent domain.

Ronald Reagan was fond of reminding us of a fundamental economic truth: “If you want less of something, tax it.”

Of course, President Reagan wasn’t referring to broadband infrastructure at the time.  But his observation is no less true in today’s digital economy.  In fact, since the earliest days of the commercial internet back in the ‘90s, a bipartisan consensus in Congress has recognized the universal truth of President Reagan’s warning and worked to ensure that local taxes and fees didn’t become an impediment to the build-out of our national broadband infrastructure.

Congress enshrined this prohibition against local taxes on broadband in the bipartisan Internet Tax Freedom Act.  Similarly, the Cable Act provides a national framework that encourages network deployment by limiting the power of local governments to impose investment-killing fees.

The success of this light-touch framework is self-evident.  Since 1996, broadband providers have invested $1.6 trillion to build out our nation’s broadband infrastructure, deploying high-speed networks at a pace that far exceeds what European countries have managed.  And while there are clearly deployment gaps still to be closed – particularly in rural America – the urgent necessity of closing these gaps argues even more strenuously for continuing to heed President Reagan’s warning.

But as sure as the sun rises in the East, there will always be high-tax local jurisdictions eager to treat private sector investments as their own personal piggy bank to be raided to fund big-spending government budgets.  Despite the obvious historic success of the federal prohibition on internet taxes and fees – and despite the fact that world-class broadband infrastructure is increasingly become table stakes for any local community that hopes to thrive in the digital age – some localities have challenged the bipartisan pro-investment consensus in court.

Faced with these legal challenges, the FCC is about to kick off a proceeding to clarify its policies limiting how local jurisdictions can use local franchising laws to impose taxes and fees on broadband providers.  We strongly urge Commissioners to defend the longstanding, bipartisan consensus pre-empting state and local efforts to add new fees or obstacles to broadband investment.

Make no mistake about it:  The internet is an interstate service.  Networks – and the packet of data that fly across them at the speed of light – don’t stop at state lines.  If ever a technology existed that met the Constitutional definition of “interstate commerce”, it’s the internet.  That means it’s up to federal policymakers to defend the (wildly successful) national pro-deployment framework against attacks from local jurisdictions more interested in grabbing a few short-term bucks.

As a nation, we want more broadband investment.  It’s one of the few things Democrats and Republicans seem to agree on.  So the FCC should remember President Reagan’s wise advice and preempt local governments from adding taxes and fees that will discourage the very investment we all agree is needed.

After sending out my 29 tweets on local control, which were all theory, I sent out these 14 specific implications of coming to understand that local control is a false doctrine:

That was all theory. Now, implications (1/14) #txlege

The state can limit the ability of municipalities to tax, including property taxes and sales taxes (2/14) #txlege

I'm working on a paper in which I lay out all my arguments against the idea that local control is some kind of sacred government principle, and that states have no right to pre-empt local governments from doing pretty much whatever they want to do.

I had hoped to have the paper done before the start of Texas' special legislative session, but I had hoped to have it finished before the start of Texas' regular legislative session back in January, too, and that didn't happen either.

So I decided to post some of the most important points last night in a series of Twitter posts. But since Twitter must be the stupidest platform for lengthy, organized arguments, I'm posting them here in this blog as well.

This post contains the 29 tweets that lay out the general argument. In a second post I'll list the 14 additional tweets that lay out some implications of the argument.

1. [begin local control rant] #txlege

I was honored to learn this morning that The Village Voice had included me in their listing of the "10 Worst Rightblogger Ideas of 2016."

Here’s a link to the piece, and here’s the money quote:

“Local control is not a trump card that allows municipalities to restrict economic freedom,” declaimed Tom Giovanetti at the Institute for Policy Innovation. Get outta here with this “consent of the governed” bullshit — we’re talking about money!

The macro context here is what Village Voice views as those nutjob libertarians and their insistence on economic freedom, and the micro context is the debate over cities like Austin, Texas regulating Uber out of the city. Village Voice sees this as democracy in action, of course, while I see it as the tyranny of the majority infringing on the economic freedom of the average guy.

Now, I’m being a bit tongue-in-cheek here, of course, but since you know a man by his enemies, I’m delighted that the lefties at the Village Voice find my arguments to be ridiculous.

In a few weeks we have another policy change coming out of Washington—this time new regulations on money market funds—that seems almost intentionally designed to cause harm to the private sector and to slow economic growth. I’m starting to wonder whether this is simply more Big Government incompetence or something more insidious?

I tend to attribute most failures of government to ineptitude rather than conspiracy. There’s no reason to think the average government employee is any wiser or more knowledgeable than the average person in the private sector—in fact, there’s every reason to believe otherwise, since various federal protections make it harder to weed out incompetent federal employees.

But suppose for a moment that I am wrong—that at the highest levels of the most important federal agencies, there are actually devilishly clever people playing the game several moves ahead of the rest of us. Making moves that are vital to the survival of their most cherished and most useful institution—the federal government—regardless of the impact on the American people.

That scenario might be more probable or less probable, depending on your degree of cynicism, but it hinges on a defensible premise—that the interests of the federal government and the interests of the American people are NOT the same thing. The federal government is not a proxy for the country. As Ronald Reagan said in his first inaugural address, “We are a nation that has a government—not the other way around.” It’s said that the smartest thing the Devil ever did was convince people he didn’t exist. Well, the smartest thing the federal government ever did was convince the American people that its interests are their interests. The truth is, the federal government is the most powerful special interest in America.

So if you’re the federal government, what is your greatest threat? Not war or terrorism, because war and terrorism have proven to be windfalls for federal government growth. Almost certainly the single most important institutional concern of the federal government today is managing its own debt, which has risen to an unimaginable $19.4 trillion dollars. Interest alone on the debt is now one of the largest line items in the federal budget, and so servicing its debt and avoiding insolvency is as important to the federal government as it would be to any business or household.

Here's some language we'd like to see in the appropriate section of the GOP platform. In case anyone's interested:

The Internet is a platform for disruption, allowing individuals, private enterprises and entrepreneurs to communicate and engage in commerce in new ways, breaking down walls of distance, size and established power.  Regulators and tax collectors, threatened by the disruptive Internet that empowers people and private businesses, are pushing for their powers to regulate and tax to grow in the same way, across borders and reaching every corner of the Internet.  The Republican Party should consistently support Internet policies that allow people and private enterprise to thrive, without providing new and expanded powers to tax and regulate so that the Internet does not become the vehicle for a dramatic expansion of government power.  Maintaining fundamental principles of limited government in an increasingly Internet-enabled world is a critical role for the party that puts people ahead of government bureaucracies and regulators.