It seems that Silicon Valley and pundits from the left and the right have found a lot to love in Hillary Clinton’s technology and innovation agenda (0). Maybe they should think again.
News headlines have characterized the plan as a love letter (1) to Silicon Valley or a Silicon Valley wish list (2). Indeed, the trade group The Software Alliance issued a press release (3) embracing the candidate’s agenda. The left-leaning advocacy group Public Knowledge (4) is excited for expanded taxpayer funding for Internet and more net neutrality. The Washington Post (5) quoted Berin Szoka, president of the right-leaning Tech Freedom, as saying that Clinton “hit the ball out of the park about making broadband deployment easier,” a comment that the think tank repeated on its Facebook page (6).
Despite this enthusiasm, there is much to worry about in this agenda as it provides a blueprint for diminishing US leadership in tech. Here are some of the features that may sound like they promote technology and innovation, but in reality drain value from customers and industry. The Clinton plan:
1. Expands handouts to political allies
The plan is packed with handouts to friends. It will subsidize computer science teachers, provide grants to government schools for STEM education, subsidize more job training programs, fund business incubators, continue the Broadband Technology Opportunities Program (BTOP), and create a $25 billion Infrastructure Bank, just to name a few.
More subsidies to a failing government education system won’t promote tech. Market innovators, such as private schools and charter schools, and entrepreneurs like Udacity (7), Lynda.com (8), and the Khan Academy (9), are pressing to fill unmet demand for quality education in STEM and other fields. The US needs more competition in education, not subsidies that would mostly benefit the education establishment and new regulations that would benefit political allies (10).
New initiatives in incubators and infrastructure are likely to follow the well-worn path of the green energy subsidies and the Department of Commerce’s BTOP program. Billions of taxpayer and electric customer dollars have gone to Elon Musk (11) (founder of Tesla Motors, SolarCity, and SpaceX) and Solyndra (12). The $4.7 billion BTOP program is plagued with political favoritism (13) and has had little if any positive impact (14).
2. Increases government role in broadband
The plan will expand subsidies from the federal government to cities, regions, and states to invest in dark fiber, broadband in recreation centers and transportation centers, and free public WiFi. Of course these programs will be wrought with political favoritism and waste. For example, one of the Obama administration’s programs for rural broadband development resulted in so many failed and uncompleted projects (15) that the Rural Utilities Service, the part of the Department of Agriculture charged with managing the $3.5 billion program, stopped releasing data.
3. Makes empty promises of less regulation
The plan (16) is hardly a home run for making broadband deployment easier. It says that “localities may seek” (emphasis added) to streamline permitting processes, develop infrastructure maps and pursue “dig once” policies. It also says that Clinton would “challenge state and local governments to identify, review, and reform” barriers to new infrastructure competitors. These are weak promises at best. These state and local barriers to business exist for a reason: governments find them profitable, politically and financially. Secretary Clinton’s plan doubles down on these incentives.
4. Promises an open Internet, but delivers a closing one
Despite claims that she will fight for free speech and American ideals by way of ensuring an open Internet, the plan appears to do the opposite. The plan supports the Obama administration’s efforts to hand over Internet governance to an entity where governments may be the most powerful stakeholders (17). It also strongly endorses net neutrality, which continues to grow into the major barrier (18) to customers getting the Internet services they want.
Not all is bad in the plan. The promise of lower barriers to entry in networking is better than no promise at all. Plans to prepare radio spectrum policies for 5G, to improve cybersecurity for government systems, and to increase the mobility of labor in tech specialties are also good for technological advancement. But these small gains come at a large price that could give many of its supporters buyers’ remorse.