Heritage's James Gattuso, posting on the Tech Liberation Front, finds an interesting provision in the Senate's latest telecoms bill:

Guess the State and Win a Subsidy

Are you good at geography? If so, you may enjoy the small geography quiz buried deep inside of the telecommunications bill now pending in the U.S. Senate. Hidden on page 121 is a paragraph directing the FCC to expand universal service payments to "insular areas, including any insular area that is a State comprised entirely of islands..."

Can you name all the states that are comprised entirely of islands? No, Rhode Island isn't one of them. As it turns out, the list of states covered by this provision is quite short:

1.Hawaii.

And, by total coincidence, a senator from that state -- Daniel Inouye -- is the co-chairman of the Senate Commerce Committee -- which wrote the bill.

The provision stems from a decision by the FCC last year to change the way that telephone subsidies are calculated for "insular" areas such as Puerto Rico and Guam, thus increasing the amount they could get. That led, in turn, to a request by Hawaiian Telcom that Hawaii also be considered an "insular" area. The term usually includes only U.S. territories and possessions, not states, thus leaving Hawaii in the cold, so to speak. The provision in the Senate bill -- proposed by Senator Inouye as a committee amendment -- solves that problem, by creating a brand-new class of insular areas: states comprised entirely of islands.

The provision illustrates how far the bill has strayed from a hoped-for focus on eliminating unneeded regulation. At its core, there still is substantial positive reform: streamlining of the video franchising process. But that important change is surrounded by a luau of special interest provisions.

Commerce Committee Stevens yesterday said that due to controversies over the net neutrality issue "may well lead to [the telecom measure's] total defeat this year after 19 months of work..." But given provisions such as the one on page 121, one has to wonder how well that 19 months was spent.

Posted by Andrew Grossman at 08:47 AM | Permalink | TrackBacks (0)

Software development usually goes like this, basically: draw up a roadmap for the next version, code, test and fix (repeat), and then ship. But for Microsoft, there's another major step in the process:

Microsoft now anticipates regulatory reviews as just another step in its development of Windows, the dominant PC operating system.

According to the article, in the U.S., a technical committee set up as part of its antitrust settlement advises the company on how to make its software.

If that wasn't bad (and probably pointless) enough, there's Europe, too:

"In Europe, we don't have guidance that is anywhere near as concrete as in the United States," he said. "My worry is that we won't have clarity from the European regulators until it is too late, until just before Vista is scheduled to ship, and we won't be able to make changes. And then we'll be right back to debating the past, as we are now, instead of addressing these issues before the product is shipped."

How much of the six-year wait between Windows XP and the forthcoming Windows Vista does this explain? It's hard to know. But no doubt the company will be wasting its development resources creating neutered versions of its operating system for European regulators for years to come.

Posted by Andrew Grossman at 01:55 PM | Permalink | TrackBacks (0)

Yesterday evening, the House Appropriations Committee took a short a break from its busy schedule of loading up the federal budget with wasteful earmarks and voted to attach a $2.10 hike in the minimum wage to the health and education appropriations bill. Supporters says that this will help the poor make ends meet. In reality, minimum wage increases are ineffective, unnecessary, and counterproductive tools in the fight against poverty, argues Heritage's James Sherk:

Minimum wage increases don’t fight poverty because most of those who earn the minimum wage are not from poor households, and most workers in poor households do not earn the minimum wage. The average minimum wage worker’s household earns over $45,000 per year – well above the poverty level. More workers with incomes close to the minimum wage come from households earning over $80,000 per year than from poor families. Similarly, very few poor Americans earn the minimum wage—only one in every fifty earns wages close to the minimum. If Congress wants to pass programs targeted at helping poor Americans, raising the minimum wage is wide of the mark.

A higher minimum wage is not necessary to raise workers’ wages because most minimum wage workers’ incomes rise without government intervention. Minimum wage jobs tend to be entry level positions for people with little experience in the workforce. As workers gain experience and skills, becoming more productive, they earn raises. That is why Prof. David Macpherson of Florida State University found that approximately two-thirds of all workers hired at the minimum wage were earning more than that within a year.

This fact also makes minimum wages counterproductive in the fight against poverty. Entry level jobs teach workers skills essential to success in the workforce. They train employees in such basic skills as showing up to work on time and relating with customers. Workers need these skills to move up the job ladder. But when the minimum wage rises, businesses create fewer entry level positions, preferring to hire experienced workers who are more productive than their entry-level counterparts. This leaves some workers without experience and training and unable to start their climb up the job ladder. That is one reason that researchers have documented significant negative long-term effects from minimum wage increases. Prof. David Neumark of Michigan State University has found that minimum wage increases reduce earnings and employment over a decade after they go into effect. By removing the opportunity for many workers to develop basic skills, the minimum wage actually reduces incomes.

As it now stands, the Appropriations Committee’s minimum wage increase will probably fall on a parliamentary point of order: congressional rules do not allow policy changes in spending bills. However, Congress should not reject this minimum wage hike (just) because it violates budget rules. Congress should reject it because raising the minimum wage is a bad idea.

Update>: More from Cato's William Niskanen, who calls this "The Dumbest Bill of the Year (So Far)":

An increase in the minimum wage has long been a symbolic issue for the Democrats, however inconsistent with their other professed political values. House Republicans should challenge the Democrats on this issue, pointing out that an increase in the minimum wage would most hurt those that they claim to help. To do this, the House Republicans should split off the minimum wage provision from the appropriation bill, allow a separate floor vote on this provision, and demonstrate the absurdity of this proposal by a defeating this measure by a large margin. I’m waiting for a demonstration of good sense, in part, to determine whether there is any remaining reason to favor a Republican majority in the House.

Posted by Andrew Grossman at 01:18 PM | Permalink | TrackBacks (0)

Is net neutrality really just government regulation of the Internet by another name? This hilarious Flash cartoon answers that question and more.

Posted by Andrew Grossman at 12:22 PM | Permalink | TrackBacks (0)

The quote alluded to in the subject of this post is usually associated with the NRA and firearms, but in recent months many have attached it to a new topic: Internet freedom. It became a rallying cry in the fight to keep the FEC and campaign finance "reform" away from bloggers' keyboards and mice.

So it is a strange meme collision indeed when a well-known Second Amendment group, long devoted to keeping the government away from its members' guns, come out in favor of...regulating the Internet. But that seems to be what's happened, explains Heritage's James Gattuso:

Last time I checked, the second Amendment referred to a “well-regulated Militia” being important. I didn’t catch the part about a regulated Internet. Yet, there was Gunowners of America, pushing for wide-ranging government controls on how network providers run their networks.

How very, very odd.

Posted by Andrew Grossman at 04:04 PM | Permalink | TrackBacks (0)