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The letter reads
We are writing to express our deep concerns regarding H.R. 3615, The Rural Local Broadcast Signal Act. As representatives of organizations dedicated to limited government, we are concerned that this legislation currently before your committee will increase the role of government in private markets and distort innovation and investment in the developing communications market.
Innovation in commercial technology markets involves considerable risk. Consumers may not value new products or services and investors may not recoup their outlays. With this risk comes not only the potential for great success, but also the potential for spectacular failure. Such is the history of commercial technology. From the telegraph to the Internet, America has witnessed the meteoric rise of companies such as Western Union and Iridium only to see them fall again when they miss unforeseen innovations or shifts in the marketplace.
The movement of the millions of consumers that comprise the market can be all but impossible to predict and the economic repercussions of failing to do so can be steep forcing companies to default on loans and file for bankruptcy protection. Risk is well managed by America's capital markets. Perhaps the most efficient in the world, our private system deters many bad investments from ever being made. Yet, because risk cannot be eliminated altogether, unsound investments still occur. Government involvement in private capital markets only serves to expand risk and encourage specious investments that leave taxpayers liable for federally guaranteed loans. This process retards market efficiency and drives innovation in misguided ways.
The Rural Local Broadcast Signal Act would authorize the Department of Agriculture to guarantee $1.25 billion in loans for the construction of satellite, cable or wireless subscription-based systems to deliver local broadcast signals to rural areas.
According to the estimates of the Congressional Budget Office, taxpayers would be on the hook for $365 million dollars to finance a project of questionable viability. Worse, this project would be administered by the Rural Utilities Service, an agency that has been well criticized for distorting communications markets by making loans better left to the discretion of the private lenders.
While access to reliable and affordable information is vital for all Americans, government programs that push technological applications beyond their capacity actually limit the ability of the market to provide the most efficient and economical means of achieving this goal. By the time this government program is able to address the problem, estimates are 2006, the market will have further diminished the already small percentage of Americans living in rural areas that cannot access information with innovations we are unable to imagine given current rates of technological innovation.
We urge you to lead your committee to reject this attempt to expand the role of government into areas that are more efficiently and appropriately executed by the private sector.