Regulatory reform clock ticking, especially for broadband expansion

By Anthony Hennen | The Center Square

HARRISBURG, PA — Pennsylvania’s regulatory state is causing headaches, from long wait times to approve major projects to driving up costs that undermine the goals of federal programs.

“We aim to strike a balance between the need for safeguards to protect the public and the imperative to create a business-friendly environment that fosters entrepreneurship, job creation, and prosperity,” Sen. Dan Laughlin, R-Erie, said during a Senate Republican Policy Committee hearing on red tape in the commonwealth.

Pennsylvania, experts testified, is in a competition to improve on its past while competing with other states.

“Pennsylvania really has a choice: it can modernize regulations and unlock opportunities for families and businesses — or it can do nothing, in which case it risks falling behind as jobs, investment, and talent move elsewhere,” James Broughel, an economist and senior fellow with the Competitive Enterprise Institute, said.

Broughel told legislators they need to cut red tape and learn from what states like Ohio have done.

Patrick McLaughlin, a senior research fellow and director of policy analytics at the Mercatus Center of George Mason University, echoed Broughel, pointing to Virginia’s regulation reforms as a model.

“Virginia’s approach addresses two potential failure points in the regulatory process: failure in the design of individual regulations and failure in the management of accumulated regulations,” McLaughlin said.

He recommended that legislators run cost-benefit analyses of all regulations, review existing ones with the goal of cutting regulations by 25%, and create an Office of Regulatory Management to oversee the restrictions.

“The fundamental question to ask is, ‘Does it do more good than harm?’” McLaughlin said.
Legislators were warned that, with broadband expansion, its regulations fail that test.

“Pennsylvania’s task has become very, very challenging,” Todd Eachus, president of the Broadband Communications Association of Pennsylvania, said. “BCAP has been told by the Department of Labor & Industry that (the Broadband Equity Access and Deployment program) is not a broadband program — it’s a jobs program.”

Inaccurate job classifications from L&I, he said, has driven up the cost of labor. While the federal government and other states have “telecommunications technician” as a job classification, L&I categorizes these workers as electric linemen instead.

The decision could shrink the ultimate impact of broadband expansion and the federal dollars that fund it.

“Construction managers have told BCAP that without an appropriate broadband worker classification, the prevailing wage labor rates from L&I may raise project costs for broadband builds by nearly 50%,” Eachus said.

“Since there’s a 25% required provider match, these increased costs will even make it more difficult for small and midsized broadband providers to participate.”

Those costs could make it “nearly impossible” to get broadband to unserved Pennsylvanians, he said.

The constellation of municipalities across the state, with their varying and sometimes contradictory requirements, presents another set of hurdles for statewide action for broadband, such as getting a right of way to install new infrastructure.

“The challenge is that each (municipality) applies regulation or creates their own rules around management of the right of way,” Eachus said.

Though those rules can undermine broader goals, holding someone accountable for them isn’t easy — many rules are created in regulatory agencies rather than within state law.

“Regulations put in place by unelected individuals who are not accountable is a part of this bigger problem that we’re developing, both at the state level, but the federal level,” Sen. Scott Hutchinson, R-Oil City, said. “Nobody’s accountable for these regulations that are put on the books because the bureaucrats are still gonna have their job at the end of the day.”