Rural Telecommunications Subsidies Do Not Help
The common justifications for government subsidies for rural telecommunications are to promote universal service and to promote economic development. While the case for subsidizing many rural telephone services is stronger than for more urban settings, it is still weak and subsidy implementation has likely been corrupted by rent seeking practices. Because of this and because many newer technologies tend to reduce rural disadvantages, a policy of limiting subsidies is likely efficient.
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"Taxation by Telecommunications Regulation,"
NBER Working Papers
6260, National Bureau of Economic Research, Inc.
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