Blog - Page 54

A group of Wall Street analysts provided key advice to the Senate Commerce Committee at a hearing Mar. 14th. The following excerpts are drawn from both oral and written testimony (emphasis added throughout). In a nutshell, the consensus is that the investment outlook for broadband is somewhere between uncertain and bleak. Net neutrality or a la carte regulatory mandates would make the outlook worse. “As media consumption over the Internet develops at a rapid pace, I believe that it is too early to introduce regulation on key issues such as a la carte packaging and pricing and on net neutrality as the market is still in its early stages. In fact, the broader media and communications sector is perhaps at Read More ›

Supply-side economists for decades have said that there is only one closed economy — the global economy. Economic policy must therefore take into account global movements of goods, services, people, capital, and assets. Monetary policy, in particular, must acknowledge the dollar’s preeminent place in the world economy and the effect the intrinsic value of the dollar and its value vis-a-vis other currencies has on world trade and politics. Finally, a top policymaker is acknowledging this key fact enunciated by Robert Mundell and the supply-siders so long ago. Last night in New York, Fed chief Ben Bernanke said that “the central bank would need to pay more attention to global financial conditions in setting interest rates, moving beyond its usual focus Read More ›

More good sense (sub. req.) on intellectual property from Profs. Adam Jaffe and Josh Lerner. They offer more examples of frivilous patents… “such absurdities as patents on wristwatches (paw-watches?) for dogs, a method of swinging on a swing (“invented” by a five-year-old), peanut butter and jelly sandwiches…[and]…broad ideas related to mobile email — virtually devoid of any details of implementation — that have imposed a $612 million tax on the maker and users of BlackBerries.” …Then Jaffe and Lerner offer simple, structural solutions to correct most of the system’s worse offenses: “(1) changing the USPTO review process so that the determination of whether a patent application is really new is made with as much information as practical about what related Read More ›

An article by Robert Litan highlights some of the efficiencies that broadband could mean for health care, as quantified in a recent study by the same author. The potential applications and anticipated savings are fascinating. Litan cites one study, for example, which found that broadband-based remote monitoring for all chronically ill patients could reduce hospital, outpatient, and drug expenses by 30 percent — reducing overall health care expenses for the United States by roughly one quarter, or about $350 billion annually. (See “Massive Economic Benefits Foreseen: Ultra-fast telemedicine and telecommuting can save money and improve quality of life,” by Robert E. Litan.)

Must read hilarity from novelist-turned-policy-wonk Michael Crichton on our increasingly absurd patent laws. Highlighting an upcoming Supreme Court case which questions a company’s ability to patent a basic scientific fact — in this case, that “[e]levated homocysteine is linked to B-12 deficiency” — Crichton launches a broadside against the increasing patentability of universal facts of nature, entirely obvious techniques or concepts, and abstract “strategies” used throughout the business world. “Companies have patented their method of hiring, and real estate agents have patented the way they sell houses. Lawyers now advise athletes to patent their sports moves, and screenwriters to patent their movie plots. (My screenplay for “Jurassic Park” was cited as a good candidate.)” Real software and high-technology innovators and Read More ›

Two items in today’s Wall Street Journal “Washington Wire” indicate the Administration might be wising up on the free trade front. Ambassador Karan Bhatia, who is off on a five-nation Asian trade mission, commented from Manila: “Political support for free trade is weaker than it has been in many years,” he said, citing “the recent public discussion in the United States on the issue of foreign investment,” alluding to the uproar over a Dubai investment in U.S. port operations as well as U.S. skepticism about China and the Central American Free Trade Agreement. “In a way we have not seen for years, economic isolationists on both ends of the political spectrum are reasserting themselves.” Maybe the Dubai Ports fiasco really Read More ›

Experience should not disqualify FCC nominees, but the agency should have a predictable recusal mechanism to ensure it is perceived as an impartial decisionmaker (and to ensure that federal service is not misconstrued as an opportunity to reward friends and supporters). It does not.

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Mayors and city councils are the chief threat to affordable broadband, as my colleagues and I often remark. Many places, like my hometown of Portland, Oregon, for example, tax telecom because they don’t have to get taxpayer approval (they know they couldn’t get that). But unfortunately for the Portland City Council, Oregon has the initiative and the referendum. The City Council wanted to raise taxes on cellphones, but the industry signalled its intent to call for a referendum (a poll showed that 58% opposed the cellphone tax). Telecom taxes and cable franchise fees are generally viewed only in terms of local government’s insatiable need for cash. As a result, these services are taxed nearly the same as alcohol and tobacco. Read More ›

Professor Vernon L. Smith provides a helpful analytical tool which explains why the cost of health care has doubled in the past decade and generally outpaces inflation and also demonstrates why Universal Service is inherently flawed and ultimately unsustainable (see “Trust the Customer!” in the Wall Street Journal).

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AT&T, BellSouth and Verizon are pursuing radically different approaches in the quest to deliver real broadband to the American home. With capital expenditure concerns in mind, AT&T and BellSouth are extending fiber to the the neighborhood. There will be a large market for this type of broadband until sometime in the next decade. Verizon has made the decision to bring fiber directly to its customers’ premises. Many naysayers are highlighting the challenges confronting Verizon (see, e.g., “Verizon Hits Hurdles in Big Bet on New High-Speed Network” in today’s Wall Street Journal). But they ignore that the costs of laying fiber are decreasing rapidly and will be approaching that of DSL later this decade. Verizon’s optical network will be mostly installed Read More ›