One of Them Relies Too Much On Subsidy, May Writes
WASHINGTON D.C. - Add high-speed Internet policy to the list of issues on which the two major-party presidential candidates disagree. While President Bush and Senator Kerry cite ubiquitous broadband as a boon to the economy and an important policy goal, they would move communications policy in seemingly different directions. According to the Progress & Freedom Foundation Senior Fellow and Director of Communications Policy Studies Randolph J. May, President Bush is likely to continue the deregulation he did not fully articulate until late in his first term, while Senator Kerry promises tax incentives that appear to be unnecessary to promote widespread availability of broadband.
In his regular National Law Journal column, May recites the highpoints of each candidate's polices: Kerry advocates a 10-percent tax credit for companies that invest in rural and inner-city areas, and a 20-percent credit for investment in 'next-generation' broadband anywhere. Bush offers no new tax incentives - and opposes broadband taxes by states and localities. Instead, he "is urging that outdated public utility-style rules promulgated in an earlier monopolistic voice-telephony era be jettisoned." To May, this represents the better option because it "underscores the relationship between regulation and investment."
While he criticizes the Bush administration for "not articulating a coherent deregulatory communications policy for its first three years," he praises it for seeking review of the Brand X Internet Services v. FCC case and not seeking review the D.C. Circuit decision, United States Telecom Ass'n v. FCC . Faulting Kerry for applying an "'infant industry' incubator strategy" to a rapidly expanding competitive sector, May says, "...there does not appear to be a market failure that would justify a public-investment approach."
President Bush's approach represents sounder policy," May writes. "Tax credits are government subsidies that, like most, are very difficult to terminate once established. Subsidy recipients marshal their political clout to entrench the write-offs. There is no reason to believe - assuming unnecessary regulatory impediments are not placed in the way - that free market policies won't deliver to all Americans the broadband services they demand."
The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.