Sunday, April 19, 2009

The Stimulus "Buy American" Debate, Cisco, and Fair Trade 04/19/09 Boston - Our comments on the reported lobbying effort by Cisco Systems, Inc. (NASDAQ: CSCO) to clarify the "Buy American" provisions of the ARRA have sparked argument and counter-argument over on NetworkWorld's Brad Resse on Cisco blog.

We made the point in our post here that love it or hate it, virtually no broadband network built in the US can be deployed using 100% "domestic content". If we therefore believe in ARRA's goal of quickly deployed new broadband nets by 4Q 2010, then we can't support a strict interpretation of the Act's "Buy American" clause.

As seen in the clear language of the clause itself -- a provision meant to apply to roads, bridges, and other "public works" -- Congress did not explicitly mean for it to be applied to the information technology (IT) sector. In our previous post we also made the point that the total of all IT-related appropriations in ARRA is correctly estimated at approximately $100 billion, not the "mere" $7.2 billion in the broadband stimulus section. Do we really want to hold back spending in the entire IT sector while we fight about US trade policy?

Most microelectronics, generally the most valuable components of any electronic array, are not fabricated in the US any longer. We believe that ubiquitous broadband -- high capacity telecom networks that are truly accessible and available throughout all areas of our country, and to all of our citizens -- is a critically important goal
for American society.

Truly ubiquitous broadband is a driver of economic growth, an enabler of better healthcare, a vital part of a strong educational system from advanced research to K-12 learning, and a key component of our critical infrastructure supporting homeland security and public safety communications. Smart grids are needed components of a new sustainable energy future for America. The funding in ARRA for the construction of smart grid networks presents us with great synergies, and huge business opportunities, for combined broadband / smart grid deployments. To quote FCC Charmain Michael Copps, ubiquitous broadband is the "cross cutting" enabler of all these highly beneficial applications.

As we responded to Brad Reese: Yes, of course we want to bring as many jobs back onshore as possible. We have always supported folks like John Kerry and Barack Obama that are serious about changing the federal tax code so that incentives for the offshoring of jobs are removed. Let's move ahead as a nation to truly reach fair trade agreements with our trading partners. Markets around the world are still not fully open to American high technology manufacturers and service providers -- as we well know from our own work in ASEAN countries.
Let's let our trading partners know that reciprocity means just that.

As we work to reform "free trade" policies to make them truly "fair trade" policies however, let's not let the our national broadband agenda be delayed any longer.
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