Why Rural Telecom Subsidies May Do More Harm Than Good

A few weeks ago, I had the good fortune to attend the annual Rural Telecom Conference, or Rural TeleCon, where I debated Christopher Mitchell of the Institute for Local Self-Reliance on the issue of municipal broadband. It was a lively discussion, and Mitchell came well-prepared. Much of the debate stayed where it should: what role, if any, the government should have in the build-out of infrastructure and provision of service. I mention this not to rehash the argument, but to introduce some further thinking on the topic. Right now it appears that big cities are stepping back from municipal wireless, at least until a new business model can be formulated. Muni broadband is not going to go away, however. And from what I could tell from my day at Rural TeleCon, stands every chance of being subsumed into the wider issue of funding universal service in rural areas. I emerged from Rural TeleCon somewhat disappointed. The 2007 conference, held Oct 15-17 in Springfield, Ill., brought together lawmakers, regulators, executives, and technicians from rural phone companies around the country, many of whom seem ready to accept, unquestioned, that market forces have somehow failed and large scale government intervention is required to ensure universal broadband, especially in rural markets.