AEI’s technology policy scholars have been hard at work this summer. Antitrust cases at the Federal Trade Commission (FTC), continued debate around Big Tech regulatory proposals in Congress, a massive bipartisan investment in semiconductor chip manufacturing, and the rollout of a national broadband infrastructure funding program are just a few examples of recent policy developments our team has been deeply engaged in.
Looking toward the fall, we will continue to monitor and provide expert commentary on these issues, emphasizing the importance of free enterprise, human freedom, and the competition of ideas.
See below for what some of our scholars had to say about their areas of policy expertise over this past summer, along with what they predict for the coming fall season.
John Bailey
The passage of the CHIPS and Science Act of 2022 and the Inflation Reduction Act (IRA) provides an unprecedented investment to boost research and development spending, bolster domestic manufacturing of semiconductors and advanced energy production, and accelerate the research and deployment of clean energy technologies. For example, CHIPS provides $10 billion to establish 20 new technology and innovation hubs throughout the country. The IRA substantially increases the availability of the federal income tax credits (45Q) to accelerate domestic carbon capture, utilization, and sequestration projects. The challenge will now fall to implementation. Federal agencies need to quickly develop guidance and regulations to allocate funds. Governors, universities, and the business community will need to develop consortia and plans to win projects, investments, and competitions authorized in these bills.
Claude Barfield
First, with the passage of the CHIPS and Science Act of 2022, attention will turn to the rollout of competition among companies for the $52 billion semiconductor fabrication plant (fab) manufacturing package included in the bill. Last week, President Joe Biden signed an executive order giving a leadership role to Commerce Secretary Gina Raimondo, surrounding her with a sizable advisory council headed by White House officials that includes multiple departments and agencies. Interest here will turn to the terms and conditions that will be attached to the multibillion-dollar fab subsidies—and the priority given to particular chips.
Second, in coming weeks, the Biden administration hopes to forge a strong alliance with the so-called “Chip 4” alliance (Japan, South Korea, Taiwan, and the US). Analysts have projected an ambitious agenda, from coordination of subsidies to standards-setting and export controls. South Korea is the wild card, as its companies retain substantial ties to the Chinese market.
Jeffrey Eisenach
The lesson of this summer for me is in the humbling nature of “Be careful what you ask for!” For decades (literally) I have argued for transferring authority for tech regulation from the Federal Communications Commission (FCC) to the FTC—and lo and behold, whether by accident or not, that’s exactly what the Biden administration has given us. I have to admit, it’s not working out the way I hoped: My old agency, the FTC, has embarked on an agenda reminiscent of the one that caused the Washington Post to label it the “National Nanny.” But there is a silver lining: Thanks to the White House’s inability to get a majority at the FCC, we at least haven’t had to refight the net neutrality battle. For that we can all be grateful.
Jim Harper
At the beginning of this year, I posited that “the ‘privacy’ issue lumps together a panoply of different human values and interests that aren’t amenable to a legislative ‘fix.’” With Congress now considering such a “fix” in the form of federal privacy legislation, I anticipate tough lessons from privacy laws in California and Europe will catch up with lawmakers and slow the drafting process. As the Federal Trade Commission simultaneously considers a rulemaking on “commercial surveillance and data privacy,” questions will arise as to which governing entity can—and should—enact such sweeping regulatory mandates, along with whether federal privacy measures would preempt existing state laws.
Mark Jamison
This year, antitrust activists advanced several pieces of legislation and antitrust cases designed to give governments a greater role in shaping companies and industries. Said “activists” include the so-called neo-Brandeisians, who believe that economies should be made up of small firms, and people who believe that governments can and should use antitrust to pursue non-antitrust goals, such as promoting labor unions and redistributing wealth. The activists’ actions have been helpful in that they had to put meat on the bones, so to speak, which revealed that their ideas are poorly formulated and largely unsupported by facts. So there is a possibility they have unwittingly paved the way for more serious antitrust reforms.
This year has also seen the launch of an aggressive federal program for broadband development. Unfortunately, Congress and the Biden administration are choosing funding approaches that are inherently wasteful and unproductive because they provide multiple opportunities for political interference, favor inefficient broadband providers over better ones, and de-emphasize making providers compete for subsidies based on price. It will be up to state governments to fix these problems.
Daniel Lyons
The bipartisan drumbeat against “Big Tech” continued throughout the summer. But as more bills are filed to rein in American social media companies, it becomes increasingly clear that beneath the surface, Democrats and Republicans fundamentally disagree about the problems posed by social media content moderation and their potential solutions. I expect more light and heat from both parties as midterms approach—Democrats seeking to incentivize greater content moderation and Republicans wanting greater protection from censorship—though I doubt that any meaningful policy change will emanate from Capitol Hill in the end. The next big move on social media content regulation is likely to come from the judiciary.
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