Sent to You From My High-Speed Internet Connection
The St. Louis Business Journal wrote a delightful editorial about the state and federal subsidization of broadband access for rural areas. The article quoted our research analyst, Christine Harbin (you have to be a paid subscriber to read her comment on the Business Journal site):
Some will argue the money could be better spent on education, health care, you name it. Indeed, there are many needs but these federal funds were designated for broadband. The state’s in-kind contribution does not impact the dire budgetary situation or projected $600 million shortfall.
Only the Show-Me Institute, the ultraconservative think tank, finds a reason to object. Research analyst Christine Harbin commented: “If an individual desires faster Internet service, he or she can either pay the market rate for the service or relocate to a larger town in order to access a broadband connection that’s less expensive.”
Of course, we received Ms. Harbin’s remarks via a high-speed Internet connection, and we certainly would not have wanted to miss sharing them with you.
The Business Journal could not have illustrated Christine’s point more succinctly. She, and the Business Journal, have both chosen to locate in the city of St. Louis. This decision entails extra costs, like the earnings tax and a higher cost of living, but it also has some cost-saving benefits, like less-expensive broadband access.
It is more expensive to provide Internet access to rural areas. This does not mean that rural areas should not have Internet access, only that they should shoulder the steeper costs of this service if they want to use it. When Internet access is subsidized, it distorts the market because the lower price leads people to consume more without seeing the true cost. If someone opts for the lower general cost of living in a rural town, she should accept that urban amenities may not be available at as low of a price as they are in more populated urban areas. In the same way that rural areas may be loathe to subsidize an urban area’s mass transit, it is reasonable for urban areas to be loathe to subsidize a rural area’s broadband Internet.