WASHINGTON -- Presidential candidates are touting widespread broadband as a boost for employment and rural education, but a close look at financial interests suggests tech policy may also be a campaign paycheck.
Candidates for both of the major political parties are drawing contributions from the technology industry, and from communications firms in particular. But the proportion differs.
Numbers Game
Presumptive Democratic presidential nominee Senator John Kerry of Massachusetts says universal broadband access is necessary for the country to rebuild its tech sector and increase employment in high tech industry.
As of mid-June, 38 percent of the $2,415,894 Kerry has received from his top 20 donors has come from contributors with a strong interest in the technology sector, according to data collected by the Center for Responsive Politics.
Meanwhile, 5 percent of the $5,886,487 provided by the top 20 contributors to the incumbent Republican candidate, President George Bush, comes from tech companies or lobbyists. The majority of Bush's top contributors are financial firms that may have investments in the technology sector but are not directly acting on tech firms' behalf.
Another 5 percent, or $3,332,700, of Bush's total contributions grouped by business sector came from the communications and electronics industry. At nearly $3.8 million, donations to the Kerry campaign from the communications and electronics industry nearly matched Bush's, but they account for 9 percent of Kerry's total donations.
Bush says broadband will facilitate a classroom in every living room, giving the most remote citizen access to a wealth of information and opportunity. The president has set the goal but has not outlined its execution other than imploring Congress to permanently ban Internet taxes.
Broadband Challenges
At the heart of the broadband issue is the cost of deployment to rural areas. It is expensive--and some officials say unreasonable--for telecom companies to deliver miles of wire to an area where there may be only a handful of customers.
Seventy-five percent of all U.S. zip codes are eligible for broadband by at least two companies, according to a recent report by the Brookings Institution's Joint Center for Regulatory Studies. The remaining 25 percent are the problem.
Many telecom experts see wireless technology as the answer to this expensive problem. If physical cables are not needed, the cost of supplying the service is dramatically reduced.
If wireless is the proposed answer, then the problem rests with the need for more wireless spectrum. The Federal Communications Commission would need to free more spectrum and perhaps change regulations regarding competitors' sharing spectrum.
Presidential candidate Kerry lists three initiatives needed to promote broadband effectively: Make more spectrum available for experimentation, encourage the federal government to reallocate spectrum for third-generation wireless phone networks, and provide a tax credit to telecom companies deploying broadband to rural areas.
While his plan encourages innovation and opens licensing for wireless broadband, some technology experts have criticized his proposal of a tax credit and subsidies.
"We argue against subsidizing broadband to increase penetration because subsidies are likely to result in economic inefficiencies," The Brookings report states.
Deregulation Urged
David McIntosh, a former Republican Congress member from Indiana, told "the tale of two technologies" at a recent discussion on broadband policy at the Heritage Foundation.
McIntosh compared France's Minitel, a 1980s phone incorporating cutting-edge technology, to the evolution of the cell phone in the U.S. Innovative technologies spread more quickly in an open market system than in a regulated subsidized environment, McIntosh argued.
"When the Minitel came out in the 1980s it was way ahead of U.S. technology. It was heavily subsidized by the government, and now it's a dinosaur," he said.
"Over the past ten years we've had a relatively deregulated regime. The market has been allowed to develop to meet consumer tests and demands, and the government allowed flexibility in tech standards," he added. The development of sophisticated cell phones and handheld devices is evidence of the success of this environment, McIntosh added.
Taxing Questions
Banning taxes on Internet services would help spread broadband, many experts say. Currently, DSL lines are taxed because they run through phone lines and are considered a telecommunication service, whereas cable Internet is not taxed.
Consumers are generally nervous about new technology and careful not to spend money on technology that may drop in cost or soon become obsolete, the Brookings study says. It suggests price may be a main reason DSL, one of the first broadband technologies, is not as successful as cable.
The FCC is in court over the classification of coaxial cables as "information services," which would subject broadband cable to regulations similar to DSL. Currently, neither state nor federal government regulates cable. While the measure would level the playing field, some say it would slow the broadband market.
The Brookings study "Universal Broadband Access" concurs: "Existing government regulation of broadband networks is counterproductive: it is time for the government to complete the deregulation of broadband began last year by the FCC."
Even if it does not become a major issue in the campaign, policy could change depending on who occupies the White House.
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