Friday, July 9, 2010

Verizon, ATT Subsidies

According to today's Washington Post, Verizon and AT&T each received over one billion dollars in federal subsidies. The idea was to encourage development of rural telephone networks.

Attracting capital, whether it's financial or human, to rural America is rarely easy. Many parts of "the sticks" can't get first-rate medical care or Internet service. For someone who lives in or adjacent to a major urban area, the idea that Barney Fife can't get online seems like a joke. I have some sympathy to the rural perspective in this case. I grew up in a small town, went to school with farm kids, and could look out my bedroom window and see cows in the fields. The predominant feeling in town was that their taxes went to the big city (in this case, New York) and the local residents were getting fleeced.

The current development of rural telephone markets suggests the farmers are getting their revenge. However, Verizon and AT&T are big city operations all the way. I don't know what's fair in this issue, but I don't believe many Verizon or AT&T execs live in the boondocks.

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