McCain's Tech Plan and Reed Hundt's Questions

Kevin Maney writes: John McCain is supposed to be posting his detailed technology plan on his Web site. I just checked, and it's not up yet.

However, I got an e-mail from Reed Hundt, former FCC chairman under President Clinton (so, a Democrat) and now a McKinsey partner and business book author. Hundt found a version of the plan, and has some questions about it. Here's what Hundt sent:

It was slipped into public domain today. Little was made of it by the McCain campaign, but I reviewed it. Seems to me that there are three issues:

a. McCain asserts that there should be a tax credit of 10 percent of wages for each r and d employee, but this proposal means that there would be a hand-out of cash (approximately $8 billion per year by my calculation) to existing firms even if they added no new employees in r and d and made no new investment. Moreover, if they built a solar farm or a new manufacturing facility, they would NOT get the r and d credit. Can he possibly mean that? This appears to be a hand out to support the status quo and would not do anything to encourage new investment or new job creation. Do I misread this?

b. McCain suggests that firms providing broadband access to rural and low income users would get tax breaks that apparently would equal their costs. In other words, the big communications companies would have the government cover (in whole?) their costs for providing service. What kind of service? How much money? How many people? I can't figure any of that out with precision, but given that we have about 45 million households without broadband, I could imagine that the tax break for the handful of firms that provide internet access would amount to as much as 45 million households times $500/year (rough estimate of cost per household) or $22.5 billion a year. If market shares now extant hold constant, that would be a tax break of about $8 billion a year for the two Bell companies alone. Can this be what McCain really wants? If not that, what is he proposing?

c. McCain declines to put net neutrality into law. Indeed, he declines to guarantee all Americans the right to obtain the information they want, communicate to everyone they want, send non-obscene and lawful information to anyone they want, over the Internet. Why? What's the hold-up? Why not assure this paradigm? Instead, McCain wants the FCC to decide these net neutrality on a case by case basis. That way provides no predictability for investors, no assurance for Americans, and of course plenty of opportunity for lawyers and lobbyists to capture the process. And for what?

More on the McCain plan here.

UPDATE: Sorry, I missed where the tech plan was posted. It's here.

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