Seventy-three years ago a system of subsidies called “separations and settlements” was created to move the U.S. to universal telephone service and help underserved—read “rural”—areas develop phone systems. And in the age of monopoly phone service—in the age of the old Ma Bell system—those subsidies worked well and for the most part achieved the stated goal.
And then came technology, which resulted in competition, to which market forces reacted. And then, inevitably, came deregulation.
Decades passed before those who were abusing the public trough of subsidies were called to task and, frankly, we still struggle today with the vestiges of separations and settlements. Phone bills are choked with disproportionate tax schemes and a multiplicity of subsidy funding from universal service to phone systems for the deaf. They are narcotics that the abusers have remarkable difficulty leaving behind.
But despite this progress towards the market system and the continued opening up new eras of unfettered competition, exciting product development and attractive deployment with real benefits are emerging to the consuming public.
Disrupting this slow but seemingly steady progress is now Federal Communication Commission Chairman Kevin Martin, who wants to turn back the clock and reinstitute rural subsidies. It’s a solution without a problem!
Let’s be honest: There have to be ways to bring incentives to rural development without getting people hooked on the subsidization drug.
Overnight delivery in hard-to-serve areas isn’t that easy. And creating new subsidies only serves to imprison the recipients and thwart real development and deployment.
Every day in every burg and hamlet in America there are incentives being used that are far short of direct subsidies. We do it in construction projects. We do it in the hi-tech industry. We do it in bio-tech innovation. And in none of those cases—that’s right, none of those cases—are direct subsidies to providers required.
So, in the name of progress—real progress—let’s not backslide. The future is in technological innovation, competitive spirit, market-force realities and deregulation. Subsidies are harmful drugs and we believe in a drug-free America!