L. Neil Smith's
Number 180, July 1, 2002


Rescuing Us From Success
by James Maynard

Special to TLE

On June 8th of this year, Forbes magazine published an article, written by Quentin Hardy, entitled "Boondoggle". This article concerns Joseph Liebermanís recently submitted National Broadband Strategy Act of 2002, which calls for Government sponsorship of high- speed Internet connections across America.

In the article, Hardy states "the go-it-alone libertarian air of the last decade has given way to cries for help from Washington". The problem is, the calls for help are coming from Washington.

It is rare that the "rescuer" calls for their own help before diving after a victim, except when those calls come from the bureaucratic halls of big Government.

And yet, the last ten years of a libertarian laissez-faire attitude from Government towards the internet has resulted in tremendous growth in the industry. According to the California Voter Foundation, there were 3 million internet subscribers in 1993. Just six years later, that number reached 100 Million. In less than ten years, the internet went from offering less than 100 web sites, to offering millions of web sites.

Yet, in 30 years of operation, the Government-run Amtrak service has yet to turn a profit for a single year.

The Post Office, which came close to breaking even a few years ago, is now clamoring for a postage increase to help meet costs.

Those who see a need for Government to run to the need of the computer industry have things backwards. So why would such a call for be heard? Much of the call for Government funding of a broadband infrastructure comes from TechNet, a 5 year-old lobbying group run by John Chambers, Cisco Systems chief executive. He believes wide-spread broadband should be "... a top national priority ... like putting a person on the moon." Mr. Chambers is a well-known Republican donor, who is now courting Democrats. Such a system would require several million dollars worth of Cisco routers, and other equipment. It matters little to those who would profit from such an undertaking whether the Government-funded program would produce viable results; once the contract is signed, and the check mailed, the suppliers are satisfied.

The history of the computer revolution shows that the evolution of technology is best served by private initiative, small private programmers, and choice in the marketplace. The history of Government programs, whether it is the bankrupt Social Security system, the misguided war in Vietnam, or the failed drug war, shows that Government cannot be trusted with the control of any major project.

When the home computer market was first blooming in the 1980ís, Apple and IBM fought for the largest niche in the home market. Despite being easier, having more memory, and being more stable, Apple lost the race. This was because people were able to easily write programs for the IBMís (what we would today call PCís). A vast storehouse of computer applications quickly flooded the market. The inexpensive, diverse selection of software drew people en-masse to the IBM/DOS platform, and a little company named Microsoft would find themselves the supplier of the operating systems for these new devices. Unguided development produced greater results than a top-down management system, such as Washington provides.

When submitting this act, Senator Lieberman stated that the purpose of the bill was "to spur agreement on a national strategy for accelerating its development and deployment, and ultimately to help bring on what we all hope will be the broadband boom" [reference]. Well, Mr. Lieberman, it seems the computer industry has done just fine without Government help, thank you very much. In fact, in the same statement, Senator Lieberman states that the computer industry was responsible for 30% of the economic growth experienced between 1995 and 2000.

With this remarkable growth, it would be a grave mistake to take the reins of success, and hamper it with the bottleneck of Government inefficiency.

The Senator states, "The broadband buck is still stuck on the government's desk". Yet, without Government interference, broadband technology is growing by leaps and bounds. As more businesses enter the broadband communication industry, the choice of suppliers becomes ever greater. The competition allows prices for high-speed access to drop, while the performance and speed of these connections becomes more pronounced.

Government sponsored broadband development would likely lead to regional monopolies, exempt from the laws of supply and demand which foster an environment of lower prices, and greater quality for goods. Local telephone service and cable television are already in this quagmire. Due to this lack of competition, consumers are abandoning local phone service for cellular phones, and cable for satellite dishes.

One need only look at the track record of the computer industry, and the other great nearly unregulated industry, cellular phones. Contrast this with the sluggish performance of Amtrak and the Post Office.

Senator Lieberman is correct that a vast wide-band internet infrastructure will benefit this country to a great extent. However, only private industry can provide a system good enough, fast enough, and at a low enough cost for such a system to be a success. Senator Lieberman, if you truly believe that broadband would be beneficial to this country, then provide it with the greatest chance for life. Keep Government out of it.

Look for Maynard's article archive at http://www.jmaynard.org

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