The Economist has a column urging an American strategy to deal with the decline of our landline telephone system. (h/t The Urbanophile.)
Copper telephony is becoming increasingly obsolete even though America’s wireless coverage lags other industrialized nations. (“Despite some of the flakiest mobile-network coverage in the developed world, one in four households has now gone mobile-only.”) Our broadband penetration is also not very good. (“15th in broadband penetration among OECD countries.”)
The decline of the traditional telephone system is not only a technological issue, but also a socioeconomic one. (“Landlines are the platform for many public services, such as emergency response. And taxes on landlines are the basis of the complex system of subsidies to ensure universal service, meaning an affordable phone line for all.”) Additionally, the column says that landline operators support more pensioners than even the auto industry.
The Economist column suggests that wireless phone service be assured for rural areas by means of a reverse auction system (as India has used) whereby the provider who asks for least cash to supply a particular area wins the contract. With respect to broadband:
[T]he role of the state has less to do with limiting handouts than increasing choice. Fibre-optic networks can be run like any other public infrastructure: government, municipalities or utilities lay the cables and let private firms compete to offer services, just as public roadways are used by private logistics firms. In Stockholm, a pioneer of this system, it takes 30 minutes to change your broadband provider. Australia’s new $30 billion all-fibre network will use a similar model.
It seems to be that the only way to ensure coverage everywhere would be to tie profitable areas (like, Indy and Ft Wayne) with unprofitable areas (e.g., LaGrange County). Of course, that would require the R-word. Regulation.
That’s already how it works to some extent through the universal service fund. Profitable areas subsidize at least plain old telephone service for unprofitable areas.
Are cell phones charged for the fund as well? I know there are all of those little tax surcharge things but I am not sure what they are for. If not, can’t they just tack it on to cell phones and then use some of that money to build better cell coverage in rural areas? The few people my age (28) that I know that still have a landline get it through their cable provider and not a traditional landline so I can’t envision many people still having a landline in 20 years. Hopefully by that time they can get the broadband (even a limited broadband since there aren’t as many people) out into the real rural areas. I grew up in LaGrange County (ironic as it was used as an example above) and my parents still can’t get any sort of high speed internet or even cable TV where they live.
USF should be used to start pulling fiber everywhere, now. If not, then we need to create some utilities (think Vectren or Cinergy) that will do it for us in exchange for HEAVY regulation and an open network where you can move your ISP in minutes.