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Rural Telecommunications Subsidies Do Not Help

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  • Ward, Michael R.

Abstract

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.

Suggested Citation

  • Ward, Michael R., . "Rural Telecommunications Subsidies Do Not Help," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association.
  • Handle: RePEc:ags:jrapmc:132985
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    References listed on IDEAS

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    1. Garbacz, Christopher & Thompson, Herbert G, Jr, 1997. "Assessing the Impact of FCC Lifeline and Link-Up Programs on Telephone Penetration," Journal of Regulatory Economics, Springer, vol. 11(1), pages 67-78, January.
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    3. Hausman, Jerry & Tardiff, Timothy & Belinfante, Alexander, 1993. "The Effects of the Breakup of AT&T on Telephone Penetration in the United States," American Economic Review, American Economic Association, vol. 83(2), pages 178-184, May.
    4. Jerry Hausman, 1998. "Taxation by Telecommunications Regulation," NBER Chapters,in: Tax Policy and the Economy, Volume 12, pages 29-48 National Bureau of Economic Research, Inc.
    5. Kaserman, David L & Mayo, John W & Flynn, Joseph E, 1990. "Cross-Subsidization in Telecommunications: Beyond the Universal Service Fairy Tale," Journal of Regulatory Economics, Springer, vol. 2(3), pages 231-249, September.
    6. Eriksson, Ross C & Kaserman, David L & Mayo, John W, 1998. "Targeted and Untargeted Subsidy Schemes: Evidence from Postdivestiture Efforts to Promote Universal Telephone Service," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 477-502, October.
    7. Kaserman, David L & Mayo, John W & Pacey, Patricia L, 1993. "The Political Economy of Deregulation: The Case of Intrastate Long Distance," Journal of Regulatory Economics, Springer, vol. 5(1), pages 49-63, March.
    8. Wolak, Frank A., 1996. "Can universal service survive in a competitive telecommunications environment? Evidence from the United States consumer expenditure survey," Information Economics and Policy, Elsevier, vol. 8(3), pages 163-203, September.
    9. Jerry Hausman, 1998. "Taxation by Telecommunications Regulation," Books, American Enterprise Institute, number 53052.
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    Keywords

    Agricultural Finance;

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