I agree with Andrew that the following words from President Obama should make every conservative’s heart sing, and I suspect no conservative’s heart will sing louder at these words than the heart of Mickey Edwards. Thus said Obama:
… I value the constructive criticism and the healthy debate that’s taking place around this [stimulus] package, because that’s the essence, the foundation of American democracy. That’s how the founders set it up. They set it up to make big change hard. It wasn’t supposed to be easy. That’s part of the reason why we’ve got such a stable government, is because no one party, no one individual can simply dictate the terms of the debate. I don’t think any of us have cornered the market on wisdom, or that do I believe that good ideas are the province of any party.
Of course, it’s easy to speak and celebrate those words … unless you’re in the trenches of Congress, trying to meet the dear President’s deadline to save the economy. There, in those trenches — when the seemingly simplest, no-brainer parts of legislation like the stimulus bill become frustratingly difficult — you probably start wishing the founding fathers had made big change just a little bit easier.
Case in point, returning to Andrew, who shares a “Dissent of the Day” from one of his readers.
That reader rattles off a series of examples of what he/she believes are “the best and most stimulative parts of the [stimulus] bill.” One of those examples is rural broadband, which the reader argues will provide “a valuable service to the population” and act “immediately.”
I highlight that example because rural broadband is something with which I’ve had several years of direct experience — experience that suggests the following:
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Yes, no question about it, rural broadband provides “a valuable service.”
No, there’s very little that’s immediate (or easy) about it.
Our company provides broadband service to a number of secondary markets and rural areas. We’ve invested a billion-plus dollars in our broadband systems and networks in a few short years, not only launching broadband service in areas where it didn’t exist before, but delivering progressively faster speeds to many of those areas, rivaling the service levels available in far larger markets.
Granted, there are still some areas we can’t reach, given their incredibly low population densities. Miles and miles of wires and equipment, costing more money than you can imagine, would need to be installed to reach a handful of paying customers. The payback model on those investments (even at break-even) is ugly — although the economics are dramatically improved if government backing is available. But government backing (in turn) raises a host of not-easy questions, such as: Who gets the funding? How do you vet/qualify fund recipients? How do you guarantee that fund recipients invest most of the money in bringing service to areas with no service rather than areas where there’s already service — and competitive service options, to boot?
Congress tried to answer those questions during the early years of President Bush’s administration. The result was a program administered by the USDA’s Rural Utilities Service (RUS), which proceeded to dole out billions of dollars in low-cost loans to companies that used the money to build broadband plant in some “unserved” areas, but also in many areas where either (a) new subdivisions with million-dollar homes were being constructed, despite the technical “rural” designation of those areas; or (b) three-plus broadband providers were already duking it out for a few hundred customers each, suggesting that a fourth or fifth entrant would likely not be viable in the long run, risking a default on the government loan.
In fact, the misdirection of the loan funds was so severe, it resulted in a slap on the RUS’ wrist from the USDA’s Inspector General, followed by a Congressional re-write, last year, of the original authorizing legislation, in an attempt to more productively guide the distribution of the money.
Of course, for every company that complained about the RUS loan funds being misdirected, there were others who complained about how burdensome the loan application process was and how painfully long it took the RUS to review and vet the applications it did receive.
Turning back, then, to the current stimulus bill, the broadband funding mechanism in it will likely be grants (and potentially some tax breaks) rather than loans — but the potential problems could be the same if Congress isn’t careful: Unserved areas could still be ignored and the entire process could still be delayed by over-complicated review and vetting procedures — delaying by years the impact of this portion of the larger set of stimulus funds.
So once again, there’s nothing easy nor immediate about this section of the bill, despite the fact that it might seem easy and immediate to Andrew’s reader — and probably to millions of other people. And this is just one relatively small part of the bill. An estimated $6 to 9 billion out of $800 to 900 billion. In other words, you can take the complexities of that one section on broadband and multiple it by 10 (or more) — and then multiple that sum by the number of Senators and Representatives, plus their various staff, plus the President and his staff — and you start to get a sense of why (beyond the typical partisan sniping) there’s so many conflicting signals emanating from DC the last few days.
Big change is hard, indeed.