Grassroot Perspective – Sept. 16, 2003-Broadband of Gold; Voice of America; Medicare Malady #31: Who Are the Drug Bills Supposed to Help Again?; A Responsible Energy Policy Enhances – Not Suppresses – Domestic Supplies

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“Dick Rowland Image”

”Shoots (News, Views and Quotes)”


– Broadband of Gold

By Jeff A. Taylor and the Reason staff

The Federal Communication Commission’s long-awaited decision on broadband rules
is both more and less than it seems. Less because it essentially follows the
same Bell-centric path the FCC has traveled for several months now in its rulings,
and more because it seems to close the door forever on undoing the feds’ top-down,
price-setting micromanagement.

The FCC thinks the Bells must be able to recoup to the greatest extent possible
any benefit extending from their deployment of fiber optics, the better to compete
with cable in the neat little FCC duopoly. So the number of players will shrink.
Connection re-sellers like Covad will gradually lose any discount from the Bells
over the next few years. Also, while the Bells will still have to share their
old copper lines with re-sellers, they won’t have to let re-sellers use their
new fiber optic lines.

This is not a surprise, though it could have the effect of locking consumers
into a broadband future with little or no competition. As long as the FCC buys
the line that competition retards innovation and risk-taking, we are doomed
to get little of either.

– Voice of America

By Jeff A. Taylor and Reason staff

Meanwhile, the real frontline of the telecom war has been blazing in Minnesota.
There the state Public Utilities Commission voted to require the voice-over-Internet
provider Vonage to comply with all the rules and regs that apply to old circuit-switched
phone companies. That marks the first such ruling by a state regulatory board.

The immediate requirement is for the New Jersey-based company to obtain Minnesota
telecom licenses (after paying the requisite fees) and to begin paying into
the state’s fund for 911 service. Vonage says it intends to fight the ruling,
possibly in a courtroom. Other states and the FCC are watching the matter closely.

Just for kicks, maybe Vonage should ignore the Minnesota ruling and see what
happens. Are state troopers going to break into Vonage customers’ homes and
confiscate their voice-over-Internet equipment? This is really the crux of the
matter, as sooner or later the technology will evolve to let people bypass the
old phone network completely — and without the help of a third-party company.
What would the world look like with peer-to-peer telephony?

Above articles are quoted from The Reason Public Policy Institute, Reason Express

– Medicare Malady #31: Who Are the Drug Bills Supposed to Help Again?

“Near-poor” retirees — too “wealthy” to qualify for public assistance but unable to afford comprehensive private health insurance — are among those least likely to have prescription drug coverage. But they won’t get much help from the prescription drug proposals pending before Congress.

A recent analysis from the Commonwealth Fund finds that a retired couple living
on $20,944 a year in 2006 would still spend a substantial part of their income
on prescription drugs under the House and Senate proposals now being reconciled
by a Capitol Hill committee.

How much is “substantial?” Under the House proposal, that couple would pay $2,437 or 11.6 percent of their income for drugs. Under the Senate bill, the couple would spend $3,208 or 15.3 percent of their income, according to Commonwealth, a New York-based private foundation that specializes in health and social issues.

The Heritage Foundation reached similar conclusions in a study on Medicare patients
with private drug coverage. It found the Senate bill would force average Medicare
patients to pay about $621 more than what they would pay under their existing
drug coverage, according to a July 15 research paper by Heritage health-care
expert Lanhee Chen.

So tell us again. Who are the drug bills supposed to help?

Above article is quoted from The Heritage Foundation, Medicare Maladies 8/26/03

”Roots (Food for Thought)”

– A Responsible Energy Policy Enhances – Not Suppresses – Domestic Supplies

By Charli E. Coon, J.D. Executive Memorandum #894

Over the past decade, growth in the nation’s demand for energy has outpaced
production. The U.S. Department of Energy’s Energy Information Administration
(EIA) projects that by 2025, consumption will increase by 43 percent and production
by only 23 percent.

As the Senate resumes floor debate on a comprehensive energy bill (S. 14), its
members have the opportunity to adopt responsible policies that enhance domestic
energy supplies. They also, however, could pander to special-interest groups
and pass measures that exacerbate the gap between supply and demand, aggravate
an already sluggish economy, and jeopardize national security.

S. 14 includes helpful provisions that would boost domestic energy supplies,
such as sensible improvements in the hydropower licensing process and repeal
of the antiquated Public Utility Holding Company Act. Other measures, however,
would interfere with energy markets, reward special-interest groups, and prolong
the existing imbalance between supply and demand.

Market-distorting provisions and energy-suppressing amendments have no place
in a responsible energy policy. For example:

Loan Guarantees

When a project is deemed economic by the marketplace, there is no need for any
special government incentive or subsidy. Conversely, if market conditions do
not support a project, the financial risks should not be shifted to taxpayers.

Alaska Natural Gas Pipeline

S. 14 provides a federal loan guarantee for construction of a pipeline to deliver
natural gas from Alaska’s North Slope to the lower 48 states. It also places
restrictions on the selection of a route for the pipeline. Market forces, not
political interference from Congress, should determine the pipeline’s route.

Nuclear Power Plants

Loan guarantees are also provided for up to seven new nuclear power plants.
The Congressional Budget Office (CBO) estimates that a plant could cost up to
$3 billion. The CBO also considers the risk of default to be above 50 percent.
The financial risk of a new plant should be shouldered by the private sector–not
shifted to taxpayers.
Indian Lands
Encouraging energy development projects on Indian lands is laudable. Forcing
taxpayers to bear the financial risk is not. The CBO estimates that this loan
program would cost taxpayers about $30 million in 2004, $140 million over the
2004-2008 period, and $200 million over the next 10 years.

Ethanol Subsidy

The Senate approved a floor amendment that would nearly triple the amount of
ethanol in the nation’s fuel supply by mandating that refiners use 5 billion
gallons of ethanol by 2012. Disguised as a bill to help struggling farmers and
enhance environmental quality, this mandate is nothing more than a “corporate
welfare” scheme that will enrich a few large agribusinesses and burden consumers
with a hidden tax. The Senate should remove this misguided taxpayer subsidy.

Market-Distorting Floor Amendments

Senators plan to offer amendments during consideration of S. 14. Some of these
measures are very ill-advised.

Renewable Portfolio Standard

Despite two decades of billion-dollar funding from taxpayers, renewable energy
is projected to remain a minor contributor to U.S. electricity supply. EIA estimates
that electricity generation from renewables will increase to only 8.5 percent
in 2025, and only 3.3 percent if just non-hydroelectric renewables are counted.

Despite this dismal record of market penetration, some Senators want to force
retail electricity suppliers to generate a specified portion of their production
from new renewable energy resources. Families and businesses need reliable — not intermittent — sources of electricity. The marketplace — not big government mandates — should decide the most efficient way to generate electricity.

Climate Change

James Schlesinger, Secretary of Energy in the Carter Administration, in a recent
article in The Washington Post noted that the current scientific knowledge of
climate change is not settled and uncertainties “must be reduced.” Notwithstanding
major scientific uncertainties, some Senators want to adopt radical regulatory
policies on climate change.
One expected amendment would force U.S. electricity, transportation, industrial
and commercial sectors to drastically reduce their greenhouse gas emissions.
This proposal is nothing more than a stealth energy tax on the use of fossil
fuels. It would raise the price of energy for consumers, cause job losses, and
undermine the nation’s economic and national security.

Another amendment may create a so-called voluntary registry for greenhouse gas
emissions. It would become mandatory, however, after five years under an automatic
trigger provision. A mandatory program would be particularly burdensome for
small businesses, which would be required to record and report their emissions
or face stiff penalties. Moreover, this provision is redundant. A voluntary
greenhouse gas program already exists and is being improved as ordered by the

CAFE (Corporate Average Fuel Economy)

Amendments to statutorily raise fuel efficiency standards for vehicles are also
expected. Instead of trying to improve this ineffective program, the Senate
should repeal CAFE and let consumers respond to market signals. That is the
effective way to foster energy conservation.
Tax Package
An energy tax “incentives” package of over $15 billion will be considered as
a separate amendment. Many of these so-called incentives distort the marketplace
and give taxpayer subsidies to special interests. A particularly onerous provision
would guarantee a price floor for natural gas from Alaska’s North Slope. Taxpayers
should not be burdened with assuring the profitability of energy producers.
Such taxpayer giveaways distort the market and send the wrong price signals
to consumers.
Abundant, reliable, and affordable energy is essential for a strong economy
and national security. Instead of passing more market-distorting mandates, Congress
should enhance domestic energy supplies by removing impediments to oil and natural
gas production on federal lands, including the Arctic National Wildlife Refuge
(ANWR), streamline bureaucratic regulations, and let the marketplace–not political
interference–determine the nation’s energy winners and losers.

Charli E. Coon, J.D. , is Senior Policy Analyst for Energy and Environment in
the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

Above article is quoted from The Heritage Foundation, Energy and Environment

”Evergreen (Today’s Quote)”

“Of government, at least in democratic states, it may be said briefly that it
is an agency engaged wholesale, and as a matter of solemn duty, in the performance
of acts which all self-respecting individuals refrain from as a matter of common
decency.” — H.L. Mencken

”’Edited by Richard O. Rowland, president of Grassroot Institute of Hawaii, 1314 S. King Street, Suite 1163, Honolulu, HI 96814. Phone/fax is 808-591-9193, cell phone is 808-864-1776. Send him an email at:”’ ”’See the Web site at:”’