Some Subsidies are Good Subsidies

I’m a proud advocate for rural and small town America

By Diane Smith

Montana’s rural and small towns recently came perilously close to losing the federal subsidies that support our internet infrastructure upgrades. It all happened when the Montana Public Service Commission, for reasons that appear to be at best loony and, at worst, politically motivated, appeared ready to reject the annual recertification of Montana’s “eligible telecommunications companies.”

After a major outcry over the close call, the PSC met again and voted to recertify. According to news reports, the only testimony at the second hearing against recertification was from David Herbst, Montana’s state director for Americans for Prosperity, the conservative political advocacy group founded by executives David and Charles Koch. Mr. Herbst testified that “building telecommunications access for rural Montana communities could be accomplished without government subsidies using an R and D budget.”

With all due respect to Mr. Herbst, that may be one of the dumbest statements ever.

Some industries are density dependent. Telecom is one of them. Profitability for telecom infrastructure providers is almost always far higher in densely populated areas than in low-density areas. That’s why Republican Sen. Conrad Burns and other rural senators and representatives from both parties fought relentlessly for provisions in the 1996 Telecom Act ensuring universal telecom access for our rural and remote communities. They knew these subsidies would be crucial if rural and small towns were to have the opportunity to buy technology services comparable to those in our urban communities.

Americans for Prosperity and others that represent anti-government politics had better figure this out and soon: Not all government funding is bad. And in rural and small town American, where so many of your supporters choose to live, we often need subsidies to support under-compensatory industries like telecom, healthcare, and transportation.

The unwillingness of certain thought leaders to recognize this single, salient fact is already hurting rural and small towns across our nation. Sadly, this lack of understanding could lead to population declines that are unrecoverable for us.

I’m a proud advocate for rural and small town America. I believe some of our greatest innovators are growing up today in these communities and am amazed at how often these remote places punch above their weight. But, if our access to technology is cut off, we will see rural and small town America suffer in profound ways. Our children will leave and our futures will be severely limited.

Mr. Herbst, Americans for Prosperity, and anyone else who believes that all government subsidies are evil – if ever you’d like to learn more about this, I’m happen to discuss it with you, along with ways to make these subsidies work even better and more efficiently. Until then though, please stop screwing it up for the rest of us.

Learn more about Diane by following her column here or visit American Rural at AmericanRural.org.

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