Rural Economics and Network Infrastructure Policies

Today, on facebook, the topic of policies that are so fundamental to our existing economy that we can’t even see them for what they are came up in a since-deleted thread. Rather than revisit the topic directly on facebook, I am going to write here, and then link this to my fb page and see how that goes.

The initial rant, which was truly off-topic for the group and so the deletion was justified, was a common one heard in the streets, literal and virtual here in Porterville, California: That “Obama phones” aka “free phones” are unfair, they are luxuries, and others shouldn’t be forced to pay for them.

There are so many ways to counter this argument. Before I go into my main position today, I want to note for readers that our City is one of the poorest per capita in the country, and people who are complaining are generally at or barely above the poverty line themselves. That’s all I’ll say on that today, but maybe in a future post, I’ll explore that dynamic further.

There was surprising amount of pushback on the thread for these parts, presumably from those who benefit directly or indirectly from the program. But most of it from both sides was of the finger pointing variety by the time I arrived.

I decided to take a different tack. I pointed out that it has been telecommunications policy for over a century that rural areas would have subsidized telephone lines. And that the reason for that was because the nature of network economics is that there would not be any incentive at all to invest in rural areas when profits accrue in areas with dense network connectivity and costs are incurred in supporting a non-dense network as would happen in the vast rural areas of our country.… Read the rest