Friday, March 06, 2015

On telecom infrastructure, policymakers must choose between sanctioning market failure or serving their constituents

Rural Tennesseans limited in Internet choices

As time goes on, it’s going to grow increasingly difficult for policymakers to continue to provide protection to legacy telephone and cable companies that want to preserve their partial service area infrastructure footprints. Such protectionist policies amount to government sanctioned market failure.

In the face of market failure, naturally those who live outside the boundaries of those limited footprints are looking to the public sector for help to get landline telecommunications service -- just as they did nearly a century ago for electrical distribution infrastructure. 

If their elected representatives fail to support them, they will face growing political risk come election time, particularly as more stories like this one show they’ve sold out their constituents by taking campaign contributions from the legacy providers.

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