Everybody’s talking about China, as they should be. This week has been “China Week” in Congress as elected officials consider various legislative proposals that try to counter China’s rising threat to American leadership abroad. As the economy is increasingly reliant in advanced technologies such as virtual marketplaces, quantum computing, or artificial intelligence, policymakers should be creating a legislative and regulatory environment that should bolster America’s tech industry. Instead, legislators and regulators have advanced proposals and policies that stymie the growth potential of America’s tech champions. We currently live in a digital economy and all the signs point that this will continue to be the way in the future, not the other way around. That makes the American tech sector, which has set itself apart from its peers abroad, an asset to a nation that intends to remain the global economic leader. Policymakers should be leveraging that existing advantage to secure America’s
leadership abroad. Especially as potential rivals (like China) emerge. Unfortunately, policymakers have shown a desire to step away from the light-touch regulatory approach that powers the American digital economy. Bills like the American Innovation and Choice Online Act and the Open App Markets Act, alongside the Department of Justice’s and Federal Trade Commission’s actions against tech companies, indicate how policymakers have shifted America’s approach to punish the companies that are successful today, and those trying to set themselves up for success in the future. Policymakers are concerned with threat of China surpassing the U.S. in emergent technologies like artificial intelligence. It is surprising, to say the least, that the hill is considering bills that would cripple the capacity of American companies to compete in this space, instead of setting the industry up for future success.


Walz’s Broadband Boondoggles

Minnesota Governor and Democratic vice-presidential candidate Tim Walz struck down two laws in his home state in May that had long helped protect taxpayers from wasteful government broadband projects. These laws limited municipalities that desired to construct their own government-owned broadband networks (GONs) by allowing construction only in the event of a supermajority vote by residents and in areas where a private provider did not already offer service. Walz doomed these two laws when he signed into law the May 2024 omnibus bill SF 4097. That bill will allow these taxpayer-funded GONs (unfortunately, there is no other kind of GON) to flourish in the Land of 10,000 Lakes. SF 4097 repealed any preemption laws – like the aforementioned two – aimed at preventing the proliferation of these costly projects. These laws might have seemed like common-sense statutes to protect taxpayers and their tax dollars. Unfortunately, the wisdom behind them was lost on Governor Walz. With the repeal of
legislation that helped prevent tax money from being spent on duplicative services, Minnesota taxpayers could be on the hook for millions more in wasteful spending.

In our 2020 report “GON with the Wind: The Failed Promise of Government Owned Networks Across America,” we cited dozens of examples of failed GONs across the United States, including previous projects in the Minnesota cities of Crosslake and Monticello. Monticello’s FiberNet was a particular fiscal sinkhole. Though 74 percent of voters approved its creation in a 2007 referendum, those same voters likely regretted their choice soon thereafter. After a few years in operation, FiberNet captured a mere 1,270 subscribers among a population of 13,000 residents and began running a deficit of more than $500,000 a year. Monticello government leaders – and, thus, Monticello taxpayers – began bailing out FiberNet by giving the network loans using tax dollars. This included a $3.1 million loan from the city’s Liquor Fund and $323,000 from the General Fund. Sadly, even that wasn’t enough. Eventually, the city defaulted on its bond payments altogether. After losing $4 million in taxpayer money on the
project and failing to make payments on its debts, a court oversaw a settlement agreement. That agreement required that the city pay $5.75 million to bondholders and to Wells Fargo, the bond trustee. A national study of municipal networks by the University of Pennsylvania found that the Monticello project had the highest cost per household of all networks studied with a tab of $5,549 per home. This, sadly, occurred with reasonable safeguards in place.

The new Minnesota law signed by Walz eliminates those safeguards altogether, allowing cities to unilaterally build their own networks. This means many will walk the same road into fiscal decline as Monticello did years prior. It will all happen without the need for any voter approval. In trying to have its cake and eat it too, the new Minnesota law also includes provisions that prevent new GONs from harming private providers. However well-intentioned these provisions may be, in practice, it simply means Minnesota taxpayers will have to pay for the construction of services that are not as efficient as their private counterparts. With the existence of said private counterparts, one has to wonder why the need for GONs in Minnesota in the first place. Broadband Breakfast noted that Minnesota’s change in attitude on GONs comes as the National Telecommunications and Information Administration prepares to distribute $42.5 billion in federal taxpayer money through the Broadband Equity, Access, and
Deployment (BEAD) Program. Minnesota will receive nearly $652 million of that total. The Biden administration has pushed for the creation of more GONs through BEAD, and some states have toed that line by eliminating laws that restricted or prevented taxpayer-owned broadband. States should, instead, aim to empower the free market to continue the immense progress it’s already made in closing the digital divide. That would be the most optimal use of these resources.

Unfortunately, Minnesota is joining a larger trend that seems insistent on trying to rehabilitate the abject failure that GONs have been. With the stroke of Walz’s pen, Minnesota becomes another state that leaves its taxpayers vulnerable to waste, fraud, and abuse. With new funding coming from Congress, this now means taxpayers across the nation are at risk. For the sake of taxpayers, many states should reconsider this approach.


Risking Medical Innovation

Developing a new treatment or medication carries with it immense costs and risks. Creating a single new medicine typically takes years to complete, with some processes costing around $2.6 billion. This process is extremely risky, as most drugs that enter the development pipeline never make it to market. Those that do are critical for American patients and families. Patent protections are an integral part of this system and provide an incentive for companies and investors to take these risks. They provide a period of market exclusivity during which companies can recoup their investment without the immediate threat of competition. This period is critical for recovering their high costs and reinvesting in the research that leads to the next generation of treatments. Critics argue that patents stifle competition and keep drug prices high. However, patents are not meant to exist in perpetuity. They are for a set period of time only. Once a patent expires, other companies can produce generic
versions of the drug, often at a significantly lower cost. When functioning properly, this balance between innovation and competition ensures that American patients and taxpayers receive world-beating access to cutting-edge, affordable, and safe medications.

Unfortunately, recent proposals in Congress threaten this carefully balanced system, potentially harming innovation and patient access to lifesaving drugs. The Medication Affordability and Patent Integrity Act is one such example of how a well-intentioned policy can have massive consequences throughout the healthcare ecosystem. It can also disrupt the risk calculus for many American pharmaceutical companies. The Medication Affordability and Patent Integrity Act imposes new certification and disclosure requirements on pharmaceutical companies. These requirements would force companies to provide large amounts of data to the US Patent and Trademark Office (USPTO), much of which is already submitted to the Food and Drug Administration (FDA). This excessive bureaucracy would overburden the already strained USPTO, potentially stifling innovation. This is yet another example of American companies being punished for bureaucratic inefficiencies within the federal government. Pharmaceutical
companies should not bear the paperwork hassle created by poor interagency communications. Given the connectivity between the two agencies in this critical space, Congress should not create any more potential for confusion, hassle, or added costs to an already expensive and time-consuming process. This legislation also raises significant security concerns regarding American intellectual property (IP). It would require companies to share sensitive information with another government agency, increasing the risk of leaks. This is especially concerning, given the federal government’s recent poor track record of securing sensitive data. With this legislation in place, the consequences of leaks or hacks are multiplied and hang over the heads of those expected to invest in developing the life-saving cures of tomorrow. This is particularly troubling given the ongoing threat of IP theft by foreign adversaries, such as China, which already costs America’s economy billions of dollars annually.
Opening up our IP – as well as additional sensitive information – to foreign governments undermines the strength of our innovation economy. Further, it threatens the myriad benefits that our culture of innovation brings to American workers, taxpayers, and patients.

Risking delays in drug approvals and opening up our IP to malicious actors will only harm taxpayers and patients down the line. Lawmakers must carefully consider the long-term implications of such policies and prioritize protecting the systems that have made the United States a leader in pharmaceutical innovation.


BLOGS:

Monday: Congress Must Urge FDA To Accelerate Tobacco Harm Reduction ([link removed])

Tuesday: Google Search Is Dominant Because It Is the Best ([link removed])

Wednesday: The Failures of Environmentalist Big Government ([link removed])

Thursday: A Reminder for Congress for “China Week:” Don’t Weaken Cybersecurity With Misguided Legislation and Regulation ([link removed])

Friday: Trump Gets Tariffs Wrong at the Presidential Debate ([link removed])

Media:

September 5, 2024: The Baltimore Sun (Baltimore, Md.) quoted me in their article, “FOX45: Baltimore non-profits decide how to spend opioid settlement funds.”

September 5, 2024: Maryland Gazette (Annapolis, Md.) quoted me in their article, “FOX45: Baltimore non-profits decide how to spend opioid settlement funds.”

September 6, 2024: Legal Newsline (Rolling Meadows, IL) quoted Dan in their article, ‘Taxpayers Protection Alliance: Billions at stake in battle pitting taxpayers against plaintiff lawyers.”

September 6, 2024: Townhall ([link removed]) .com ([link removed]) ran TPA’s op-ed, “Google Search Is Dominant Because It Is the Best.”

September 8, 2024: C-SPAN ran Patrick’s interview from Erick Erickson’s ‘The Gathering’.

September 8, 2024: Florida Daily (Fleming Island, FL) ran TPA’s op-ed, “Election Mail is a Rare Bright Spot for USPS.”

September 8, 2024: American Spectator ran TPA’s op-ed, “US Permitting Regime is Hampering America’s Potential.”

September 9, 2024: WBFF Fox45 (Baltimore, Md.) interviewed me for their story on Maryland’s $1.3 billion gap in transportation funding.

September 9, 2024: Our Community Now quoted me in their article, “Taxpayers Protection Alliance highlights overspending in Maryland transportation.”

September 9, 2024: WYRD Fox News Radio (Greenville, S.C.) interviewed Dan for their story on the September Presidential Debate and the two candidates' platforms.

September 9, 2024: Inside Sources ran TPA's op-ed, "Court Ruling Fuels Hope for Broadband Growth Amid Net Neutrality Debate."

September 10, 2024: The Epoch Times quoted David in their article, “Taxes a Top Issue for Trump and Harris. Congress Is Skeptical of Their Plans.”

September 10, 2024: WBFF Fox45 Baltimore (Baltimore, Md.) quoted me in their article, “Baltimore races to obligate remaining $38 million in ARPA funds as 2024 deadline looms.”

September 10, 2024: WBFF Fox45 (Baltimore, Md.) interviewed me for their story on Baltimore racing to spend COVID relief money before the deadline.

September 10, 2024: Our Community Now quoted me in their article, “Baltimore races to obligate remaining $38 million in ARPA funds as 2024 deadline looms.”

September 11, 2024: Dan appeared on the Tom Roten Show (Huntington, WV.) to discuss the presidential debate.

September 11, 2024: WBFF Fox45 (Baltimore, MD) interviewed me for their story on Baltimore racing to spend COVID relief money before the deadline.

September 12, 2024: Townhall.com ([link removed]) ran TPA’s op-ed, “America’s Economy Continues to Suffer Under Washington’s Tax Uncertainty.”

September 12, 2024: Townhall.com ([link removed]) ran TPA’s op-ed, “Walz Pushes Wasteful Taxpayer-Funded Broadband in Minnesota.”

September 12, 2024: Citrus County Chronicle (Crystal River, FL) ran TPA’s op-ed, “Regulatory overreach is not Pulp Fiction.”

September 12, 2024: I appeared on WBOB 600 AM (Jacksonville, Fla.) to talk about the aftermath of the Presidential Debate.

September 12, 2024: WBFF Fox45 (Baltimore, Md.) interviewed me for their story on the IRS Direct File program.

September 13, 2024: Issues & Insights ran TPA's op-ed, "Flooded by Stadium Subsidies: How Cities Ignore Hurricane Risks For Sports Deals."

Have a great weekend!

Best,

David Williams
President
Taxpayers Protection Alliance
1101 14th Street, NW
Suite 1120
Washington, D.C. xxxxxx

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