^{Democracy & Technology Blog} Letting the government run your business

The FCC has big plans for a national broadband strategy, according to Acting FCC Chairman Michael J. Copps

It is my intention that at our next full Commission meeting, on April 8, we will kick-off an open, participatory, public process with a far-reaching Notice of Inquiry to marshal the data and expertise we need to make sure we meet our legislatively-mandated date of one year for presenting Congress and the American people a national broadband strategy worthy of the name.
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And we will endeavor to ignore no sector of our national life. Stop to think about it for a moment. What doesn’t broadband impact as we look to the future of America? Not just the basic ways we communicate with one another. But health care information technology and the need to computerize medical records. Better utilization of scarce energy resources through the use of smart grids. Higher education and the needs of schools, libraries and students as they gear up for the Twenty-first century. More efficient agriculture. Better housing. Public safety and cybersecurity. Education. The environment. Each of these presents its own questions and new opportunities which need to be examined as part of a national broadband plan.

Meanwhile, the New York Times reports that some banks want to return government bailout funds because the conditions are proving too onerous

Financial institutions that are getting government bailout funds have been told to put off evictions and modify mortgages for distressed homeowners. They must let shareholders vote on executive pay packages. They must slash dividends, cancel employee training and morale-building exercises, and withdraw job offers to foreign citizens.

Government cannot easily resist populist and special interest pressures like these, and there is nothing preventing government from altering a deal it has struck anytime it wants when it’s politically expedient.
The bankers’ experience is a cautionary tale for broadband providers who are interested in receiving government grants. Accepting the money is like entering into a partnership agreement with politicians and bureaucrats and becoming the junior partner. Unlike a banker or an investor, the government’s primary interest isn’t whether the venture is profitable.

[A] growing chorus of industry experts are warning that asking weak banks to carry out the government’s economic and social policies could increase the drain on the public purse. These experts say that the financial assistance, while helpful in the short run, could force weak banks to engage in lending practices that will lose even more money, and that the government inevitably will become more heavily involved in dictating how banks do business.