Archive for February, 2012
We filed comments with the FCC yesterday on the proposed purchase of 122 AWS spectrum licenses by Verizon Wireless that are currently held by a group of cable companies including Comcast, Time Warner Cable, Cox, and Brighthouse. In aggregate, the licenses cover a 20MHz national footprint, about 10% as much spectrum as Sprint/Clearwire has today. The cable companies purchased the licenses in order to build a mobile broadband network that would compete with AT&T, Verizon, and Sprint, but soon discovered that the skills required to do that were outside their wheelhouse; they probably also discovered that running a multi-company consortium is no fun either, but we don’t know that for a fact. As a result, the spectrum is currently lying fallow. Verizon offered to buy it as part of a complex transaction that would also allow them to bundle mobile phone service with cable broadband for sale to their customers, and which would also allow the cable companies to offer similar “quad play” bundles to their customers. A great deal of the discussion of the transaction focuses on the bundling aspect, but that’s really quite distinct from the spectrum transaction. The FCC has business examining cross-marketing deals, but the rules that apply are very different from those that apply to spectrum.
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Last week the Wall Street Journal published an article accusing four online advertisers—Google, Vibrant Media, Media Innovation Group and PointRoll—of using special code on web pages to circumvent the privacy settings in the Apple Safari web browser for the purpose of “tracking the Web-browsing habits of people who intended for that kind of monitoring to be blocked.” The Safari web browser is used by approximately 7 percent of desktop Internet users and 24 percent of mobile users. Google responded in a statement by saying, “The Journal mischaracterizes what happened and why. We used known Safari functionality to provide features that signed-in Google users had enabled. It’s important to stress that these advertising cookies do not collect personal information.” Google also disabled the code in question.
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This week the Sustainable Energy and Environment Coalition (SEEC) held a briefing on enriching energy innovation at the local and regional level. The idea was to show off policy approaches being implemented in our cities that could be positively translated at the federal level. And one of the most interesting examples are the policy choices being made in Boulder, Colorado, a nationally-recognized hub for clean energy innovation and sustainability initiatives. The event panel showcased the city’s strategic approach for developing locally “networked” energy systems that promote private competition and drive energy innovation with the support of a diverse clean tech ecosystem.
Boulder is a unique city with an interesting past. Since the 1960s the city has levied an ‘open spaces’ tax – a small sales tax that produces revenue for the acquisition, preservation, and management of public lands around the city, preventing city sprawl and acting as a source of revenue for key economic growth policies. Building off of the successes of the open-space policy, in 2007 Boulder adopted its Climate Action Plan tax, a carbon tax on residential, commercial, and industrial consumers of electricity. Although the tax rate is
Xi Jinping, China’s leader-in-waiting and incumbent vice-president, is being given a grand welcome to the United States this week. The Financial Times notes that “no previous China vice-president has received a 19-gun salute or an Oval Office meeting with the president.” However, while the Obama administration has made a point of confronting Xi on hot-button issues like human rights and North Korea, much more needs to be said on the issue of China’s mercantilist clean energy policies.The fact is that Chinese policies, including dumping solar panels in the market to undercut competitors, domestic-requirement provisions for wind, and a myriad of IP-theft-related issues are not only stifling innovation, but harming nascent U.S. industries. For instance, last October, SolarWorld USA petitioned the Department of Commerce – on behalf of several U.S. solar companies – to determine whether China has been unfairly supporting its solar exporters. The U.S. International Trade Commission (ITC), which the Commerce Department tasked with investigating the complaint, unanimously declared on December 2, 2011 that Chinese solar panel and cell imports are hurting the American solar manufacturing industry and a final decision is still pending on whether punitive tariffs are
President Obama backed up his call to “double-down” on clean energy during the State of the Union address by proposing to boost key energy innovation investments in his FY2013 federal budget request. Compared to the FY2012 Omnibus Appropriations bill, the President’s FY2013 proposal would increase top-line investments in key DOE energy innovation-related Offices and programs by 6.98 percent or $578 million. It’s a strong statement of support for developing affordable and viable clean energy technologies at a time when clean energy innovation programs are little more than a political football.
Of course, the FY2013 budget proposal still falls short of FY2010’s peak in energy innovation investments made through the Stimulus and represents only 77 percent of what the President requested for 2012. It’s vital that more work is done to increase public investments in clean energy innovation, as the government must play an energetic role in supporting the development of next-generation technologies. However, the FY2013 budget proposal does envision where targeted public investments can be used to positively impact weaknesses in the energy innovation ecosystem.
EERE Technology R&D Programs
Overall, the President’s budget request gets a lot
A recent post by Stephen Ezell referenced, a recent op-ed by Christina Romer has touched off a back and forth on the blogshere on whether manufacturing matters. The fact that the question is even asked illustrates the lack of understanding of the issue and of the structure of our economy. Back in December Susan Hockfield, the President of MIT, made the case for manufacturing in her own op-ed “Manufacturing a Recovery”. Central to her argument is a description of some advanced manufacturing companies:
Like the jet aircraft made by Boeing, one of the country’s largest exporters, products like these require sophisticated manufacturing equipment, operated by skilled workers, and benefit from the tight integration of design and production. With goods like these, the United States can reassert an economic advantage. If we can find ways for companies of every size to exploit the possibilities of nanofabrication, advanced materials, robotics and energy efficiency, we can create networks of innovation, joining lab research to new production processes and business models.
That tight linkage between product creation and product manufacturing has been highlighted by a number of others, most notable Gary Pisano and Willy Shih at the Harvard Business School in their HBR piece “Restoring American Competitiveness”.
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The next ten and half months hold little promise of Congress producing a coherent national clean energy strategy. The same legislative gridlock over the federal budget that stalled debate on key issues last year looks to come back in force this year as well. But that doesn’t mean high-impact clean energy policy can’t be implemented. Take for example, Congressman Charles Bass’s (R-NH) recently introduced Smart Energy Act – a bipartisan bill aimed at leveraging the federal government’s 445,000 buildings to act as a “first adopter” of innovative, new energy efficiency technologies.
For many new technologies, once it’s been conceived, developed, tested, piloted, and demonstrated one thing is usually standing in its way: a customer willing to take the initial risk of purchasing the first round of product. In many industries, this “first adopter” issue is dampened by relatively low cost. Millions took a chance on the first generation of Apple’s iPod because the risk – in this case cost to consumers – was modest. Spending a few hundred dollars on a first generation iPod isn’t a personal budget altering decision for enough consumers that it creates a robust, initial market
On February 4, Christina Romer, former head of the Council of Economic Advisors (CEA) under the Obama Administration, wrote an op-ed asking “Do Manufacturers Need Special Treatment?,” and argued that they don’t. For Romer, as for most neoclassical economists, manufacturing and manufacturing jobs matter no more than any other industry or jobs in the economy. But Romer’s op-ed gets at least four critical points flat wrong. First, it conflates having a coherent set of policies and strategies to support U.S. manufacturers with them receiving “special treatment.” Second, it wrongly argues that manufacturing jobs are the same as all other jobs in the economy. Third, it misdiagnoses the central challenge facing the U.S. economy as a lack of aggregate demand when the real problem is faltering U.S. competitiveness, especially in the traded sectors of the economy, such as manufacturing. In doing so, her op-ed fails to recognize that the loss of manufacturing jobs has contributed significantly to the loss of U.S. employment, in terms of both direct and indirect jobs lost. Finally, arguments like this that manufacturing in the United States deserves no specific policy focus refuse to acknowledge the sophisticated strategies that dozens of U.S. competitors around the world have put in place to bolster the competitiveness of their manufacturing sectors.
First, those who call for a U.S. manufacturing strategy aren’t asking for special treatment or handouts from Washington. They aren’t asking—as Romer suggests—for differential, preferential tax rates specifically for U.S. manufacturing firms, that U.S. trade enforcement activity focus especially on protecting U.S. manufacturers, or for bailouts from Washington. (Notwithstanding the irony that it was Romer’s very CEA that supported the bailouts of GM and Chrysler, “special treatment” interventions which she now doth protests.)
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During the 1992 presidential election, Bush economic advisor Michael Boskin infamously stated “computer chips, potato chips, what’s the difference” to reflect his disapproval of candidate Bill Clinton’s proposals to support the high-tech industry. Many people at the time scoffed at Boskin’s comment, thinking how could anyone actually believe this. But in fact, many, many people believed it and still do. Those people are called neoclassical economists. For them the market is sacred and all-knowing and any effort by government to “pick winners,” no matter how mild or broad, is doomed to failure and will only make matters worse. For these ideologues the actual industrial composition of an economy is irrelevant. If America ends up with no high-tech manufacturing, or even no manufacturing at all, we are actually better off for it, since this result would have been produced by the all-knowing market.
Lest you think I exaggerate, just read today’s New York Times article, about the White House’s effort to “lure” jobs to America.
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Changes over Google’s proposed privacy changes need some clarification. Google has not made any radical changes to its privacy policies. Google still does not sell personal information to third parties. Google is not collecting more or less information than before. Google still does not have people in its company reading through people’s email or search history. And Google still offers users the ability to control their data through various tools including the Google Dashboard, an opt-out feature for personalized ads, and the Data Liberation Front which allows users to export data from Google services. More importantly, users can simply opt to not use Google products. As great as Google is, there are plenty of alternatives if users choose to leave
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