[Update: David Cay Johnston emailed me to clarify some points in my post. He said:
Also, it is not necessarily a subsidy to provide rural service at the same price as other service. Calling it a subsidy depends, partly, on making a value judgement about the network. If you cannot reach a relative or business in a rural place the utility of the network is reduced, making it less valuable to you and everyone else. So urban callers get a benefit, too, from rural service.
And as my column carefully points out, people in URBAN areas could end up without phones or with only high-cost phones under the rules the phone companies are writing and getting enacted, in four states so far, into law.]
I must admit that this is not a question that had occurred to a city dweller like me who takes such access for granted. But David Cay Johnston says that there is a nearly century-old obligation for phone companies that provided landline service to also be providers of last resort to all at the same price, so that people in remote areas are not disadvantaged.
But now phone companies are quietly lobbying state legislators to be exempt from that requirement and be allowed to pick and choose their customers. This will almost inevitably lead to people in remote areas losing landlines and being dependent on cell phones but this could have serious consequences for people in regions where providing landline coverage is expensive and cell phone access is spotty. The further problem is that in many areas of the country, phone companies have a de facto monopoly and customers always suffer when monopolies are not counterbalanced by strong regulatory compensating power.
This is part of a general problem of the extent to which people who live in rural or remote areas are entitled to services at the same rate as those who live in urban areas, even though the market cost is greater. In other words, the rates for the services they use are subsidized by those who live in low-cost areas. This applies to postal rates and electricity as well.
In general, my own feeling is that I do not object to subsidizing access to such basic services. It would be a pity to make the cost of living in rural areas so prohibitive that people are discouraged from living there.