The tech sector does great things for the US economy. For example, IT made up 75 percent of US productivity growth from 1995 to 2002, and 44 percent from 2000 to 2006. In 2011, IT workers earned 75 percent more annually than non-tech workers. And, finally, tech made up 5.7 percent of the US workforce in 2014. Given these great contributions to citizens’ wellbeing, one would think tech companies and governments would be careful not to kill the proverbial goose that lays the golden egg. But that could be just what is going on. Here are five ways governments and industry are trying to cripple tech.
Late last week, the White House urged the Federal Communications Commission (FCC) to take control of how cable television companies use set-top boxes, presumably for the purpose of promoting competition. In a coordinated release, the administration issued a YouTube video and three documents — an Executive Order; a Council of Economic Advisors issue brief; and a blog by the Chairman of the Council of Economic Advisers, Jason Furman, and Director of the National Economic Council and Assistant to the President for Economic Policy, Jeffrey Zients — all directed at increasing regulation and promoting free markets.
Often, an economist’s role in public policy is to explain obvious things that for some reason are being missed. This includes simple truths such as these: only a monopoly can have monopoly power, regulations should not outlive their purpose, and pushing prices below commercial levels generally decreases investment. These economic lessons could assist the Federal Communications Commission (FCC) in the “special access” proceeding, in which the agency is being lobbied by resellers to extend existing price-cap regulations from TDM-based services (on copper connections) to IP-based services (on fiber connections).
Indications are that Congress is likely to take up net neutrality once the court rules on whether the FCC overstepped in its 2015 Open Internet Order. The intent at least on the Senate side is to have strong net neutrality provisions. The House seems less likely to take that position. Are there ways to have our cake and eat it too? Can we have dynamic industries and regulation? Yes, as long as the regulatory framework is consistent with a constantly improving tech ecosystem of networks, edge providers, customers, and others yet to be named.