Rural Telecommunications Subsidies Do Not Help
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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.