A recent Politico article highlighted the fact that Vice President Kamala Harris uses wired headphones instead of Bluetooth headphones. The speculation is that her time as a member of the Senate Intelligence Committee may have made her acutely aware of the vulnerability of Bluetooth technology. Good for Vice President Harris. This kind of vigilance should be expected of government officials handling sensitive information. And, Congress needs to keep these security issues in mind when attempting to regulate app stores or any tech.
Digital Pole Position
There’s no argument that we need to close the digital divide and find ways to get people access to faster internet. The question that many people grapple with is whether the government or the private sector should lead the way. In fact, this very question of government versus private sector is at the heart of the Federal Communications Commission confirmation debate happening with Gigi Sohn. Gigi wants more government, TPA wants less government. And, as the kids say, we have the receipts as how government has spent billions of tax dollars building broadband networks that have failed. TPA’s report, GON with the Wind: The Failed Promise of Government Owned Networks Across the Country, details these failures. Now, a recent report found that red tape in regard to pole attachment policies at the state and federal level is harming broadband growth and holding up many millions of dollars in economic benefits. The study from Connect the Future, led by Western Carolina University economics professor Edward Lopez and pole attachment expert Patricia Kratvin, found that better access to utility poles so that internet providers can attach their equipment “is the most efficient means to expand high-speed broadband access to currently unserved areas of the country.”
The report determines that the overregulated pole attachment issue is costing Americans an incredible amount of between $491 million and $1.86 billion in unrealized economic gains. Because burying fiber is often prohibitively expensive, most providers try to attach their cable to utility poles where available. Providers often face resistance from the owners of the poles – usually electric companies – in the form of delayed permitting or disagreements on best practices. With lawmakers attempting to ease access to poles for providers, this is an issue that many states have begun to address legislatively. The Taxpayers Protection Alliance (TPA) testified on the need to cut such red tape during the spring session of the Texas Legislature. HB 1505, ultimately passed by the Legislature and signed by Gov. Greg Abbott, established guidelines on who pays for pole replacements and set a shot clock on how quickly a pole owner must act on pole attachment requests.
Broadband Breakfast noted that large telecoms have been forced to file lawsuits to gain efficient and timely access to poles. The Federal Communications Commission found that a Maryland utility billed Verizon “unjust” pole attachment fees by charging the maximum rate possible. The FCC also ruled this year that investor-owned utilities cannot charge pole replacements costs to providers adding new attachments to poles if they aren’t the sole cause for the replacement. These reforms come as the federal government looks to put billions of taxpayer dollars into broadband growth across the U.S. Cikanek, executive director of Connect the Future, said in a press release accompanying the report that the study “makes clear that as our country continues to invest public and private dollars into expanding broadband access, policymakers must take immediate action to ensure that these investments are maximized for impact to bring connectivity to rural communities without delay – and this includes reforming outdated and ineffective pole attachment rules.” Cikanek argued that policymakers need to establish “a faster, fairer process” for dispute resolution and utility pole access, given the “significant market power” that pole owners hold over pole attachment rates and terms. The report also said that pole owners “frequently impose onerous timetables, unfeasible permitting fees, and various pre- and post-construction requirements, including full pole replacements ahead of scheduled replacement, as part of ‘make-ready’ procedures required prior to the actual attachment to the pole.”
Racist and Expensive Davis-Bacon Regulations
One of the first issues I worked on when I came to D.C. in 1993 (yes, I’ve been here that long and yes I am that old) was the Davis-Bacon Act. This piece of legislation passed in 1931 assures union wages are paid on federal construction projects. This inflates the cost of construction which means that taxpayers are paying more (money) for less (construction). Now, with the passage of the $1.2 trillion infrastructure bill, federal construction projects just received a massive infusion of taxpayer money. And, because of the high cost of building infrastructure in America, even small additions or repair jobs on roads and bridges can cost taxpayers dearly. These costs have skyrocketed over the past few decades. A team of Brown University and New York Federal Reserve Bank researchers found that the cost of constructing a, “lane mile of infrastructure increased five-fold” between 1990 and 2008, and costs have increased even more in the 13 years since the end of that period. And now, actions by the Biden administration could increase already-bloated contract costs and run up infrastructure costs even more by “updating” Davis-Bacon compensation requirements for federal contractors. America needs to rebuild its crumbling roads and bridges, not drive itself further into a ditch.
It's impossible to make sense of the current, complicated Davis-Bacon rules without understanding the ugly racist history behind federal contractor compensation standards. As noted columnist George Will pointed out in 2017, “Davis-Bacon was enacted in 1931 to require construction contractors to pay ‘prevailing wages’ on federal projects. Generally, this means paying union wage scales. It was enacted as domestic protectionism, largely to protect organized labor from competition by African Americans who often were excluded from union membership but who were successfully competing for jobs by being willing to work for lower wages.”
Currently, the White House is contemplating a major revision to these outdated, problematic compensation rules governing federal infrastructure projects. According to Bloomberg Law reporter Ben Penn, a proposed rule “would update the Davis-Bacon Act…[and]…could redefine how employers determine what constitutes the ‘prevailing wage’ they must pay workers when the federal government finances a building project.” One analysis by the Beacon Hill Institute found that, even in its current form, the Davis-Bacon system feeds into the rampant infrastructure inflation borne by taxpayers. Comparing Davis-Bacon wages to average construction wages across nine occupational categories, the researchers found that these infrastructure wage regulations create an astounding 22 percent premium on federally contracted labor. This should not be the case, because, in theory, Davis-Bacon only requires wages from federally contracted projects to match the wages of non-federal construction projects in that same locality. But, a compensation scheme is only as good as the comparison surveys used to determine the “right” wage. The Government Accountability Office has found that Davis-Bacon surveys rely on small non-representative samples that provides a wholly unrealistic benchmark for contractors. When more than a quarter of all “prevailing wage” estimates are based on sample sizes of less than seven workers, inaccurate wage calculations will almost certainly result. Allowing 100 percent error rates in surveys is a recipe for fiscal disaster. And, the economic toll imposed by Davis-Bacon doesn’t end with runaway compensation costs and flawed survey estimates. The simple act of complying with all the law’s requirements can quickly prove unbearable for the federal agencies and major contractors trying to see infrastructure projects through to completion.
While we don’t know what exactly the Biden administration’s reforms will look like, the President has emphasized strict enforcement of the statute and high mandated wages for federal contractors. Pushing Davis-Bacon wages even higher, though, will only subvert the administration’s goals to “Build Back Better” and stretch infrastructure spending as far as it will go. Instead of focusing on prevailing wage requirements, Biden should look at ways to lower infrastructure costs through the further streamlining of permitting requirements. Extensive permitting requirements can add years to a project and billions of dollars’ worth of added expenses without doing much to further design, safety, and environmental goals. Ensuring an expedited process will be a boon to American infrastructure and prove a far better reform alternative to digging deeper into the ditch of Davis-Bacon. To truly Build Back Better should mean to get rid of the expensive and racist Davis-Bacon Act.
BLOGS:
Monday: Why China Could Revolutionize Global Tobacco Harm Reduction
Tuesday: Consumer Watchdog Opposes Rushed, Harmful Drug Pricing Proposals
Wednesday: States Reform Act is Ideal Cannabis-Reform Legislation and a Win for Taxpayers and Consumers
Friday: Taxpayer Watchdog Responds to Record Inflation Numbers
MEDIA:
December 6, 2021: WBFF Fox45 (Baltimore, Md.) interviewed me about Mosby’s budget
December 6, 2021: Fliter ran TPA’s op-ed, “Why China Could Revolutionize Global Tobacco Harm Reduction.”
December 6, 2021: KRCR ABC7 (Chico, Calif.) quoted TPA in their story, “Managing the West's wild horses: Critics say costly system fails taxpayers and animals.”
December 6, 2021: WZTV Fox17 (Nashville, Tenn.) quoted TPA in their story, “Managing the West's wild horses: Critics say costly system fails taxpayers and animals.”
December 8, 2021: I appeared on WHO 1040 AM (Des Moines, Iowa) to talk about drug police controls.
December 8, 2021: I appeared on “The Lars Larson Show” (nationally syndicated) to discuss drug price controls.
December 8, 2021: Inside Sources quoted TPA in their article, “Is Biden’s Energy Policy a ‘Trillion-Dollar Transfer Payment’ to China?”
December 8, 2021: The Georgia Virtue ran TPA’s op-ed, “Report Says Onerous Pole Attachment Regulations Significantly Harm Broadband Growth.”
December 9, 2021: WBFF Fox45 (Baltimore, Md.) interviewed me about cyber-security.
December 9, 2021: I appeared on the Tim Jones Show on KWTO 93.3 FM (Springfield Mo.) to talk about drug price controls.
December 9, 2021: I appeared on WBOB 600 AM (Jacksonville, Fla.) to talk about gas prices and inflation.
December 9, 2021: Townhall.com ran TPA’s op-ed, “Stop Digging the Fiscal Ditch Deeper with Davis-Bacon Requirements.”
Have a great weekend!
