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.

I then suggested that the “free phone” program is an extension of that policy, nothing new really. Whether the phones are “luxuries” or not is immaterial, it has long been US policy that all shall have equal access to telecommunications at the same prices regardless of the density of the network, and regardless of the income of the user.

To this, a local “Tea Party” guy from neighboring Tulare responded with a self-satisfied “..but taxes. Liberals.”

I went further though, in suggesting  that if he was so sure of his reasoning, and wanted to pay less taxes, then fine, certainly his right. Does he support abandoning the longstanding telecom policy and allowing telecom companies from here on out to discriminate in where they will invest in their networks, to the detriment of where he lives, just so that he will be able to pay fewer taxes?

And I asked him if he would abandon similar policies dating back at least as far in some cases that mandated and continue to mandate investments in rural areas in  road, natural gas, electricity and water infrastructure networks that allow our economy to function and be integrated into the markets of the broader US and world?

Unfortunately the thread was deleted before he answered, but I think the real issue is that Tea Party right wing republicans are quick to base claims on shallow arguments of “less taxes=good” without revisiting the actual policies that were decided on a partisan basis with good reason, that they definitely benefit from to this day.

To argue otherwise would be to condemn the vast rural west and smaller sections of the rural east to the economy of 1865 when railroads were ascendant and inventions of telecom, energy and auto transportation was still a decade or more away. All while the urban areas increasingly modernize and separate themselves from the rural economies.

There is a country already that is like this: In China, rural populations stream to the urban areas to the detriment of a balanced economy. The rural areas have something to offer to the urban areas besides a steady stream of desperately poor and uneducated workers, such as you see in China, but the cost of unlocking that is policies that ensure the rural economies are fully integrated with the most modern technologies despite additional per capita costs.

Posted in economics, General Information, Porterville Economic Development, sustainability, Thoughts and Comments.