Think tanks wrap-up

WASHINGTON, May 16 (UPI) -- The UPI think tank wrap-up is a daily digest covering brief opinion pieces, reactions to recent news events and position statements released by various think tanks.

The Cato Institute

WASHINGTON -- Expanding work requirements, not more spending, key to better welfare reauthorization bill, Cato expert says

As the House prepares to vote today on the welfare reauthorization bill, Cato entitlements analyst Dr. Kimble F. Ainslie made the following comments on work requirements, Temporary Assistance for Needy Families spending and increased childcare funding:

"While President Bush is promoting House welfare reform reauthorization legislation as a 'tough new approach,' it is evident that there has been considerable backsliding on work participation rules. Work definitions have become more lax under the Bush proposal and House legislation, and the House has not eliminated the major loophole on work participation, the 'caseload reduction credit.'

"It is also unclear why welfare reform advocates continue to be wedded to $16.5 billion in TANF spending, when actual spending in the states has declined considerably since 1996.

"The House compromise for additional child care spending is also a mystery, since 80 percent of welfare 'leavers' who work and are eligible for child care subsidies don't actually take up these subsidies."

WASHINGTON -- Crusader artillery system is armored white elephant, scholar says

As the Senate Armed Services Committee holds hearings today on the Crusader artillery system that Secretary of Defense Donald Rumsfeld wants to cancel, the Cato Institute's director of defense policy studies Ivan Eland had the following comments:

"The Army continues to buy 'legacy' weapons systems that do not mesh well with the vision of a 'transformed' Army. The heavy Crusader, designed to fight the heavy armor of the bygone Cold War era, is the best example of that mismatch. Even some in the Army's ground-vehicle community argue that the technology in the Crusader is not a 'leap ahead' and that the system is an expensive way to make marginal improvements in the Army's firepower.

"Nonetheless, the Army maintains that the mobile artillery piece can provide more firepower farther and faster than its predecessor, the Paladin, and can be transported with fewer airlift aircraft. Yet the ascendancy of air power -- demonstrated in all wars since Desert Storm -- could provide a more flexible substitute for mobile artillery to provide fire support for forces on the ground. Over time, artillery has inflicted an ever-lower percentage of casualties on the battlefield.

"If the Pentagon believes that the Army still needs mobile systems on the ground to provide its own fire support, taxpayer dollars could be better spent on enhancing the capabilities of the Paladin. How? By purchasing a smart artillery shell guided by global positioning system satellites, giving the Paladin a more capable gun, or investing in digital communications technology connecting artillery to ground and airborne sensors. The Army could also buy a precision multiple-launch rocket system.

"If instead the Pentagon believes that a new mobile gun system is truly needed, a research and development program for a lighter, more easily deployable alternative to the Crusader is a better use of scarce resources."

WASHINGTON -- Former CIA official offers recommendations for intelligence reform

As the House and Senate intelligence committees prepare to conduct a joint investigation into U.S. intelligence gaps in the Sept. 11 terrorist attacks, a new Cato Institute study by a former chief of the CIA's Strategic Assessments Group proposes several new approaches for the intelligence community to take.

In "Building Leverage in the Long War: Ensuring Intelligence Community Creativity in the Fight against Terrorism," James W. Harris argues that intelligence needs creative thinking and out-of-the-box approaches.

"In the war ahead, the adaptable nature of the adversary will demand an equally agile U.S. intelligence effort. More resources and better human intelligence will help. But an agile intelligence community will require something else: that the intelligence community at last dispense with the internal barriers that stifle communications and collaboration," Harris writes.

The recommendations that Harris makes for improved communication and analysis include:

-- Breaking down "stovepipes:" these hierarchical communication channels erect barriers to lateral collaboration and waste resources by allowing groups to duplicate each other's efforts.

-- An analytic "skunk works:" an institution that would promote innovation and creative thinking unencumbered by bureaucratic restraints.

-- "Red teams:" whose purpose would be "to simulate adversary strategy and doctrine, perhaps replicating, to the extent feasible, the decentralized nature of the threat."

-- A gaming and simulation center: a facility on the scale of national war colleges that is charged with gaming terrorism with the participation of U.S. and allied intelligence and policy communities.

-- A denial and deception cell: charged with "countering adversary measures to deceive U.S. and allied intelligence and devising novel means of deceiving the adversary."

"Building an agile intelligence capability will require that internal communications improve, that robust and perhaps formal alliances with external centers of expertise be constructed, and that a genuine multidisciplinary analytic effort blossom and achieve a creative flair that is not typical of bureaucratic enterprises," Harris writes.

The report is available as Policy Analysis No. 439 on the Cato institute Web site at www.cato.org/pubs/pas/pa-439es.html.

The Competitive Enterprise Institute

(CEI is a conservative, free-market think tank that supports principles of free enterprise and limited government, opposes government regulation, and actively engages in public policy debate.)

WASHINGTON -- C:\Spin: The Supreme Court's TELRIC decision: "Legal" does not mean "smart"

by Solveig Singleton

The Supreme Court's ruling in Verizon vs. FCC upholds Federal Communications Commission rules intended to foster competitors to local phone service on two key points. The ruling will allow competing carriers, known as CLECS, to lease networks from incumbent local phone companies at ultra-low rates, a plan known as TELRIC, and will oblige incumbent local phone companies to tailor "bundles" of different network elements for their competitors to resell.

But while the case represents a legal victory for the FCC, the case does nothing to restore confidence in the FCC's economics.

As Justice Breyer's lone dissent notes, the central economic issue in the case was whether the FCC had given competing carriers such a good deal on leasing the incumbent carrier's networks, that the competing carriers would have little reason to build their own networks.

Justice Breyer concluded that the answer was "yes," and that because the FCC rules discouraged competition from newly built independent networks, it was contrary to what Congress had intended in the Telecommunications Act of 1996.

But the majority did not attempt any such sophisticated economic analysis. In response to the dissent's arguments, the majority points out that there has been $55 billion in construction of competing networks by CLECs between 1996 and 2000 under the FCC rules, finessing the central issue, whether there could have been and should have been more.

The FCC may have acted legally, but that does not mean it acted wisely.

TELRIC has been in effect for several years, as the linchpin of the FCC's plan to jumpstart competition in residential areas by encouraging CLECs to lease networks from the regional Bell operating companies, or RBOCs, at wholesale and resell at retail. But it has not worked. However cheap the price at which the resellers can buy, they haven't attracted many residential customers and many seem better at slamming than at service.

Where has local competition grown?

-- In business areas where the prices the incumbents charged their customers were held high by regulation, and competing carriers built fiber optic networks to compete with local phone companies back in the 1980s;

-- From wireless services that bypass incumbents' local access lines;

-- From email, which substitutes for many local phone calls.

Given these facts, the FCC should face the reality that its policy needs revamping. If it really wants to encourage local competition, it should lead efforts by states to get rid of rate regulation in residential markets, so competitors are attracted by the prospect of profits, as they were in business markets. Another idea is to remove remaining obstacles to wireless competition that can bypass local phone company lines.

Most broadly and crucially, though, is that the FCC should try some humility. As the example of email shows, the most significant resale competition to local phone service has appeared in an area unforeseen by the FCC. Similarly, broadband was an afterthought when Congress wrote the 1996 Telecom Act.

The Supreme Court may have upheld the Commission's power to mold the telecom world to its Rube Goldberg visions, but the failure of the jumpstart policy and the constant surprises sprung by changes in technology should convince it to step back and let markets work.

(Solveig Singleton is a senior policy analyst for the Project on Technology and Innovation at the Competitive Enterprise Institute.)

Institute for Public Accuracy

WASHINGTON -- Clinton in East Timor

Former president Bill Clinton, at the request of the Bush administration, is leading the U.S. delegation to East Timor's independence celebrations this weekend.

-- John M. Miller, media and outreach coordinator for the East Timor Action Network.

"When President Clinton cut military ties between the United States and Indonesia, the Indonesian military quickly agreed to withdraw and allow in peacekeepers. If Clinton had been more assertive throughout 1999, the violent destruction following East Timor's referendum might have been prevented. If President Ford and Secretary of State Kissinger had not given the go-ahead in 1975, Indonesia might never have invaded East Timor. If subsequent administrations had not continued to arm the Indonesian regime, the East Timorese certainly would have suffered less ... The U.S. government owes the new nation an enormous moral debt -- we urge President Clinton to acknowledge it."

-- Amy Goodman, journalist who was an eyewitness to the November 12, 1991 massacre in Santa Cruz, where she was beaten to the ground by Indonesian troops. Goodman has returned to East Timor for the first time since 1994; banned from Indonesia, she has had to travel via Australia.

"Having experienced one of East Timor's bleakest days, it is exciting to witness the independence celebration. But we must not forget that the guns that shot down hundreds of peaceful demonstrators in 1991 came from the United Staets, Indonesia's largest weapons supplier. Now the Pentagon is pushing to step up assistance to the Indonesian military; this will only mean that people throughout Indonesia will continue to suffer."

-- Bella Galhos, a leading advocate for East Timor independence, Galhos spent nearly a decade in exile in Canada and returned to East Timor in December 1999.

"The courage of the people of East Timor has enabled us to triumph over what many believed was a lost cause. I am optimistic, but much still needs to be done ..."

-- Joaquim Fonseca Yayasan, advocacy director for the East Timorese human rights group HAK.

"The country is being built from scratch. Its development should be tailored according to these challenges ... The emphasis on the role of the private sector in reducing poverty is misplaced. This country arose from a dark history of injustice. Any framework of development has to include all the interrelated aspects of the community's well-being, and one of these is clearly justice across all aspects of the society."

--Ben Terrall, executive director of the East Timor Relief Fund.

"Grassroots and congressional pressure in the 1990s forced the (United States) executive branch to make concessions on its Indonesia policy, limiting weapons sales and military training and raising the level of human rights criticism. While important, these shifts do not negate the need for accountability for the overall U.S. backing of the war on East Timor. The U.S. government must declassify and release all relevant information ...

This should include a full congressional investigation into the U.S. role in the invasion and occupation of East Timor."

The Progress and Freedom Foundation

(PFF studies the digital revolution and its implications for public policy. PFF is ideologically diverse and politically non-partisan, and its work focuses heavily on communications, computing and telecommunications.)

WASHINGTON -- Hollings privacy bill: Costs outweigh benefits

Online privacy legislation by Sen. Ernest F. Hollings, D-S.C., under consideration Thursday by the Senate Commerce Committee (S. 2201) would impose significant costs without providing commensurate benefits for consumers.

That is the view of Progress & Freedom Foundation President Jeffrey A. Eisenach who has sent letters to Hollings and other members of the panel.

"Our research suggests: market forces are leading commercial Web sites to address consumer concerns about privacy; regulation of the sort proposed by the bill would likely impose substantial costs; and, regulations that apply only to online information collection practices would create still further distortions," Eisenach wrote to Senate Commerce Committee members. "On balance, our research suggests that the costs to consumers of legislation like S. 2201 would substantially exceed the benefits."

Eisenach cited the report he co-authored, Privacy Online: A Report on the Internet Practices and Policies of Commercial Web Sites, which found that "market forces are producing substantial improvement in privacy practices."

Modeled after a survey conducted by the Federal Trade Commission in May 2000, it showed that Web sites are collecting less information, privacy notices are more prevalent, more prominent and more complete, and more sites are offering choice. The survey also showed progress on such 'hot-button' issues as information sharing and the use of third-party 'cookies.'

He also cited a book by PFF Vice President Thomas M. Lenard and Senior Fellow Paul Rubin, "Privacy and the Commercial Use of Personal Information:"

"Regulation imposed on a medium like the Internet that is changing so rapidly would have unpredictable consequences," write Lenard and Rubin.

"The costs would take many forms. Regulation could create market failures where none now exist. Perhaps the most serious cost would be a loss of innovation -- new uses of information and of the Internet itself that would be frustrated by a new regulatory regime.

All this would slow the progress of the IT revolution with potentially adverse implications for growth and productivity," they write.