[rayiner]

We don’t need people to start internet companies in areas that are no longer viable. And yes, you are paying for those rural subsidies personally. Literally, through a tax on your telecommunications bill each month. Also, the original idea was to give telecom companies monopolies to allow them to use above-market returns to subsidize rural areas. This was a terrible idea and gave us the entrenched incumbents we have today. In the 1990s, Congress realized this was terrible and got rid of that arrangement, shifting to explicit cross subsidization. But service and build out requirements continue to stifle development of competition. You can’t, as a new entrant, do stuff like pursue a profitable niche (startup 101 advice). And a special tax is levied on your product, as if it were something harmful like cigarettes.

There is no free lunch! If you force urban areas to cross-subsidize rural ones, either directly or indirectly, you’ll get lower quality service at higher prices in urban area.

Look at the regulatory regimes in places like Sweden. They don’t have build out requirements or cross subsidies. To the extent the government wants connectivity in rural places, it doesn’t distort the market by having high-ROI places cross-subsidize it. It pays for it directly.