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Lessons from the ACA Health Insurance Marketplace Failure

One can’t pass a single day it seems without seeing in the news coverage of the problems with the Affordable Care Act’s Health Insurance Marketplace (HIM). But what is perhaps most surprising is not that the web site had problems, but that people are surprised that it had problems. The current process of managing and acquiring federal IT is largely broken and the failure of the HIM is simply the newest reminder of that dysfunction. We can just go down the list of past high-profile failures, including the delayed launch last year of, the FBI’s Virtual Case Files program, the Census Bureau’s handheld PC debacle, and the FAA modernization.

There are several reasons for this dysfunction. First, the contracting process does not work as it should. Larded up with an accretion of rules and requirements from past scandals and failures, only the most intrepid firms are able to manage the labyrinth called federal contracting. Moreover, as Congress has tried to use federal contracting to fulfill social policy goals that should be addressed with other policy tools, agencies must give preferences to a wide variety of businesses—small businesses, women-owned businesses,

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Balancing Innovation: Managing Current Needs with Future Success in Developing Countries

No one disputes the benefits of innovative technology. It has resulted in IT, medical, and energy advancements that have revolutionized the way we live our lives. What often goes unappreciated, however, is the time and resources invested that ultimately yields this progress. As I discussed on Friday as part of a panel at the Global Intellectual Property Center’s IP Summit, failing to acknowledge and respect intellectual property puts future innovation in jeopardy, and it is critically important that we educate developing countries on the benefits of protecting IP before it has lasting effects on not just the global innovation economy, but their own individual innovation economies

At a time when developing countries are not only trying to recover from the Great Recession, but also working toward building more prosperous economies, access to innovation is increasingly important. Unfortunately, all too often developing countries believe that to achieve their economic and social goals, they must focus on getting access to technologies (including pharmaceutical products, sometimes through issuing compulsory licenses) in the near-term, instead of setting up an environment of strong IP protection where innovation can flourish over the long-term. These actions are

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American Broadband

What is a Fair Price for Broadband?

An updated report by the New America Foundation (NAF) examines whether we are getting a good deal on our broadband in the United States. It does so using fairly straightforward methods: cataloguing advertised prices and speeds for major cities around the world. Unfortunately, to paraphrase H. L. Mencken, for every complex problem there is an answer that is clear, simple, and wrong.

We covered the issue exhaustively in our report from earlier this year, The Whole Picture: Where America’s Broadband Networks Really Stand, and a number of blog posts responding to the original Cost of Connectivity report in 2012. However, their report update makes the same claims as the last one using the same logic: we therefore feel compelled to issue a very similar rebuttal. The NAF report fails to engage the issue in a way that helps us understand what is really going on in our broadband markets.

There are two important questions to consider when examining these broadband markets: are companies offering a fair price for high-quality broadband services given their costs, and are they competing in a way that will offer dynamic improvements in the future?

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Wireless Router

New America Foundation Report Finds Municipal Broadband Providers Gouging Consumers

In its second annual report assessing broadband speeds and prices in various nations, the New America Foundation reports some disturbing findings. Broadband provided by U.S. municipal governments costs much more than broadband provided by private sector providers in other nations. The local government of Bristol, Virginia ranks 31st; Lafayette Louisiana’s service 44th, and Chattanooga Tennessee’s, a recipient of federal stimulus funds for broadband, ranks a dismal 57th in the price of broadband. All of them charge their unsuspecting citizens prices around four times higher than their private sector competitors in other nations.

As they write, “Many American consumers take high prices and slow speeds to be a given, but our data demonstrates that it is possible to have faster, more affordable connectivity in cities of comparable density and size.” New America writes that it will be releasing a report shortly calling for policy solutions to address this terrible situation. Based on their analysis, I am sure they will be calling for Congressional legislation prohibiting socialist local governments from getting into the broadband business.

Of course my reason for pointing this out is to show the absurdity of the New America

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King Luddite has a straw in his hand

Grasping at Luddite Straws

The current issue of the New York Review of Books features an article by Harvard economist Benjamin Friedman, “Brave New Capitalists’ Paradise’: The Jobs?” which is yet another reminder why we should not let economists make economic policy.

Freidman starts off by rightly pointing to the period from after WWII to the early 1970s as a golden era of low unemployment and high median income growth. He then rightly points to slower income growth over the last 20 years. His solution: less technology and lower productivity.

For Freidman has joined the ever growing neo-Luddite movement in America that mistakenly attributes our economic problems to too much technology and automation. He writes, “New technology that enhances the productivity of labor… means less labor input is needed to produce what was made before.” So far so good. But he goes on to write that “increasingly over the last quarter century, the balance [of less labor for existing goods plus more labor for new goods] indeed appears to have shifted [toward less labor].”

Why? Because “the pace of labor saving technological change has accelerated.”  Okay, let’s stop here. First, of all productivity growth

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Broadband ratings

US Broadband’s Latest Report Card

On October 16, Akami released its quarterly state of the Internet rankings comparing nations around the world on broadband speeds. The United States continued its upward trajectory, improving in both average connection speed and average peak connection speed. This new data further illustrates that the claims of some broadband Casandras, such as Susan Crawford, regarding the weakness of U.S. broadband networks are highly misleading.

As ITIF has noted, over the last five years  America has made great strides in improving average connection speeds and enhancing broadband infrastructure. According to the latest Akami study, the U.S. now ranks eighth in the world in average connection speed, up from ninth last quarter, and 11th in average peak connection speed, which grew 34 percent year over year. It should also be mentioned that the nations ranking above us in both categories either have small, densely populated geographic areas where deployment costs are lower, or enjoy significant government subsidies for broadband deployment and adoption.

The data exemplifies the success of America’s competition-based broadband model in incentivizing innovation and promoting the continued deployment of high speed networks. This is particularly clear when we

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broadband network

A Model Broadband Ecosystem

Europe’s telecom woes are “coming home to roost.” An article in the September 14th issue of The Economist discusses European Union Digital Commissioner Neelie Kroes’ call for major reforms to the European telecom system to address the poor performance of broadband networks on the Continent. This is just the latest effort by EU regulators to address a broadband system that lags well behind the U.S. and Asia, hampering economic growth and technical innovation.

As the article notes, “Only a quarter of the European Union’s people have access to new 4G networks, according to the European Commission. In America a single company, Verizon…reaches nine out of ten.”

Unfortunately, The Economist article does continue a misleading argument that has been used by some activists to denigrate U.S. broadband successes and justify the European model despite its obvious flaws. “Americans may have faster networks, but they pay a lot more.”

In fact, America enjoys the second lowest prices in the OECD for introductory level broadband. The U.S. does have higher relative prices for faster broadband, but this is not, as some critics have claimed, because of relatively higher profits. Among OECD nations, profits

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Stem Education

The STEM Crisis is Real

Recently Robert Charette penned a blog post on IEEE Spectrum titled “The STEM Crisis is a Myth,” which makes the case that rather than having a shortage of STEM (science, technology, engineering and mathematics) workers, the United States has a surplus. Unfortunately his analysis is flawed. Indeed, the post is strikingly similar to a report published by the Economic Policy Institute (EPI) (which Charette cites) in April, and about which the Information Technology and Innovation Foundation published a comprehensive rebuttal.

First, like EPI, Charette argues that STEM graduates are not obtaining STEM jobs:

In the United States, you don’t need a STEM degree to get a STEM job, and if you do get a degree, you won’t necessarily work in that field after you graduate. If there is in fact a STEM worker shortage, wouldn’t you expect more people with STEM degrees to be filling those jobs?

Yes, it’s true: some STEM graduates don’t obtain STEM jobs. But Charette is missing a baseline for comparison of this figure. Sure, some STEM graduates work in fields outside their major, but is this more or less than graduates in

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RFID chip

RFID: Readily Forced Information Distortion

The sign of a civilization in decline is when there is widespread fear of the future and longing for the past.   While America may not yet be in decline we are certainly fearing the future.   Case in point, California’s decision to back off its deployment of drivers’ licenses with embedded radio-frequency identification chips (RFID) in them.   RFID chips are small electronic devices embedded with a unique code that communicates with an electronic reader usually within a range of 1 to 2 inches.

We can thank the privacy-fundamentalists for this, for they love nothing better than to spread fear based on misinformation about technology.  As supposedly pro-tech Wired Magazine writes, this is “spy-friendly technology.”  The article claims that “Privacy advocates worry that, if more states begin embracing RFID, the licenses could become mandatory nationwide and evolve into a government-run surveillance tool to track the public’s movements.”   It goes on to say “law enforcement already monitors drivers’ whereabouts via the mass deployment of license-plate readers. But the ability to scan for identification cards in public areas could evolve into another surveillance tool.”

That sure scares me.   I don’t want the

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Multinationals (Not Main Street) are the Key to Job Growth

Yesterday the Senate Homeland Security Committee’s Permanent Subcommittee on Investigations held a hearing on “offshore profits shifting,” with a focus on making Apple and its CEO Tim Cook into the poster child of corporate tax avoidance. As I wrote in The Hill, blame is not a national competitiveness strategy.

But another theme of the event was the seeming unfairness of a situation where domestic multinationals like Apple are not required to pay the full 35 percent tax on their foreign earnings. Despite the fact that we are one of the only nations with a worldwide system of taxation (that requires U.S. multinationals to pay US taxes on foreign earnings when they bring them home), this notion is actually wrong. It is actually in the interest of non-multinational U.S. firms for multinationals to pay less in taxes. Here’s why.

U.S. economic politics is often framed as a clash between “Main Street” and big multinational corporations, with the former salt-of-the earth hard working mom and pop owners and the latter controlled by profit-hungry greedy tycoons. But this framing misses the point that what will determine whether America thrives in the global

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