[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.
I noticed those maps of cell phone coverage tend to be spotty in red states. Now not to stereotype greatly, but people who live in those areas tend to have anti-“big”-government/pro-business views. We should remind first them that it’s the big bad government forcing businesses to provide them with cheap phone service and that according to their own logic, they should allow the phone companies to depribe them of this connection to the outside world and forcing them to buy the expensive inferior alternative. Then we ask them if their views about government regulation of businesses have changed. The ones who say “yes” get to keep their landlines. The ones who still hate the idea of a federal government having power over businesses can go buy a cell phone that gets bad receiption.
My family’s vacation home in the Adirondacks of New York features spotty landline coverage -- Verizon bought into the area a decade ago, but has neglected basic maintenance and repairs, causing us to lose an average of 45-60 days service per year.
Cell service is only available if one wants to drive between 8-20 miles, depending on the area, to reach a large enough town. Even some fairly decent sized communities -- such as North Creek -- have no cell service.
Moves like this are simply a way for the companies which hold a monopoly on services in an area to further neglect basic repair and upkeep, which will generate wide swaths of inhabited land without telephone service. Regardless of political affiliations supposedly related to the coverage maps, this is a problem -- how is one supposed to access emergency services without communications platforms?
That is one of those questions that doesn’t need to be asked, the answer is already known. Certain services -- police, fire department, post office, etc. -- should never be privatized or else you’ll end up with a two tiered system. What happened to Trayvon Martins (police indifference and refusal to investigate his murder) would happen to everyone who isn’t rich.
If anyone wants a reason to keep certain services regulated, just look at what happened in California. While other US states had stable rates, Enron manufactured an “energy shortage” and blackouts in California. They did to steal millions from the public and small businesses, then siphon it off to shareholders before the stock collapsed.
How do we determine which services these are?