Tech says: Me Too!

So it is no wonder that the leaders of Cisco, Intel, and 3Com want a national policy. They claim that it should be technology neutral, but is this really possible? Isn't there a high risk that the incumbent players will be helped in favor over the entrepreneurs, who, without anyone to lobby on their behalf, might continue to face regulatory burdens without the benefits of tax incentives?

Now it probably sounds like I oppose TechNet’s call for a National Broadband Policy. Actually I support it (for the most part—I have some questions about how the tax incentives will work, for example) because it mostly advocates reducing needless regulatory hurdles.

But it is a slippery slope. Once you declare that the government has an interest in encouraging a particular industry, how long will it be until the talk shifts from cutting red tape to subsidies, tax credits, and government investment? Not long. Joe Lieberman has already taken the broadband flag and moved it towards greater government intervention, as this piece from CEI discusses. And just watch as Senators such as Hollings, Breaux, and McCain “help” the broadband cause—in some cases by advancing legislation that TechNet will surely oppose. With friends like these, who needs enemies?

Subsidies are bad not just because they transfer wealth from those that earn money to those who have political leverage, but also because they are bad for the industries they subsidize since they prevent those industries from reacting efficiently to market reality. Technology innovation is particularly dependant on the unfettered ability to adapt to rapidly changing market demands. Bring down the regulatory barriers? Certainly. But too much political intervention may simply put a premium on solving yesterday’s problem while ignoring tomorrow’s potential.