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
The state can limit the ability of municipalities to establish protected classes and so-called “non-discrimination” ordinances. (3/14) #txlege
The state can limit municipalities from passing plastic bag bans and tree ordinances (4/14) #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.
One argument against the FCC’s recently announced “AllVid” plan to regulate and “open up” the video set-top box is that set-top boxes are NOT a natural monopolistic platform that must be regulated by government in order to allow competition – in fact, set-top boxes are on the verge of being phased out and replaced by a variety of innovative new options. Apple TV, for instance, is an example of innovative new hardware for video access. But even a look at Apple TV lets you quickly see the real future of video access – apps. Put simply, in the normal course of innovation responding to consumer demands, set-top boxes are being replaced by apps on smart TVs, mobile and streaming devices. There may never be a better example of government regulation being behind the pace of innovation.
And today, Comcast announced its Xfinity Partners Program, which will allow Comcast customers to access their Xfinity content through a variety of devices and platforms using an Xfinity TV Partner app. Samsung and Roku have already joined the program, which means Comcast customers simply won’t need a set-top box if they own one of the new Samsung or Roku devices featuring the Xfinity TV app.
Seeing Comcast join the impressive number of over-the-top video providers who allow access to their content through apps demonstrates that the FCC’s AllVid rulemaking is not a response to a problem in the marketplace. The FCC has also done no economic analysis whatsoever to justify its scheme. Nevertheless, the FCC is pushing the Allvid scheme very aggressively with shortened timeframes for comments and public input. One has to wonder what, exactly, is the FCC trying to accomplish? And why the rush?
Meanwhile, industry continues at the speed of innovation while the FCC regulates looking backward.
The Consumer Electronics Show, hosted by CTA, is appropriately lauded for being a showcase of technology and innovation. As they tout themselves, “For 50 years, CES has been the launch pad for new innovation and technology that has changed the world. Held in Las Vegas every year, it is the world’s gathering place for all who thrive on the business of consumer technologies and where next-generation innovations are introduced to the marketplace.”
This year the buzz around the show was even greater than usual, largely because of the promise of a connected life becoming real in so many ways—from cars, to wearables, to thermostats and home alarm systems. Sharper pictures, bendable screens, virtual reality and the reality that your “phone” is rapidly becoming your personal “smart hub” all fought for attention inside the show. But the most accessible innovation may have been happening off of the show floor.
This year Uber, the ride hailing app provider, was operating in Las Vegas during the show. The impact was obvious. The infamous hours-long taxi lines for those trying to leave the convention center were cut by half or more. This year show attendees were able to make productive use of their time instead of waiting thirty minutes or more for a cab from the hotel to the show. As a further customer service, Uber partnered with a Dallas start-up company, Vinli, to provide riders with a Wi-Fi connection while they rode. The entire experience of attending a trade show that attracts 180,000 visitors to Las Vegas changed for the better
Could it be that the connected life that we have seen and heard about since the Jetsons might actually be becoming a reality? The AT&T Developers Summit (https://devsummit.att.com/) painted a picture of just how close we are to that future, and in some cases how we are already there.
The opening session featured Robert Scoble (http://scobleizer.com/), a recognized technology evangelist, interviewed by Andrew Keen (http://www.ajkeen.com/). Scoble delivered an optimistic message about connected technologies now becoming increasingly commonplace and discussed several technologies coming soon. He noted that, despite years of discussion and promise, the “Internet of Things” wave is just now entering homes via Nest thermostats and security systems. He remarked that those technologies essentially establish a beachhead for connected machines, making them more commonplace and understandable for consumers. He also pointed out that the cars in many garages already are or soon will be connected and that an increasing number of appliances will be also.
So, perhaps a bit under the radar, we have moved decisively into a connected world, a world where machines work more for us than ever before. And the advances will continue. Whether in everyday applications of virtual reality, putting the volumes of data we produce to use for own benefit, or through whole cities enabled by connectivity, technological advances that will make our lives even easier and more productive are beginning now. The benefits to society will continue to grow as the trend continues.
But all of this is but a dream if the chaos of invention and the disorder of innovation falls victim to legislation or regulation. As we saw repeatedly in 2015 both in the states and from the feds (with the FCC being the most prominent offender), government cannot seem to keep itself from meddling in innovation.
Almost by definition, the less regulation or legislation, the more experimentation will result. Government has its role but it is not to play nanny attempting to guide the development of technologies and markets as a group of lawyers and bureaucrats would like, with prophylactic measures that as often as not miss the mark and cause unintended consequences. Instead, regulators should sit back and enjoy the wonder of innovation, acting to clear the way rather than obstruct and delay.