Monday, April 11, 2016

Government Programs

I belong to a number of mailing lists. One that is particularly interesting is dedicated to "internet governance", which mostly means policy wonks, and would be policy wonks, speculating about the form of the next set of internet related laws in various countries, or from various super-national groups. It is interesting reading most of the time. Obviously, as you can tell from my post "Brief Thought on Government Subsidies", I disagree with the premise behind most of the discussions, but it is still fascinating to see people, some of whom play a role in developing these policies, discussing what is the current state of political thought about the internet.

One perennial issue, as you can tell from my earlier post, is the question of "universal access". Obviously, one of the many issues about which I have strong opinions, and opinions contrary to most of those posting to this list. (Though not all, at least a few eastern European members have been touting the low connection costs in Poland and Bulgaria achieved through a lack of regulation. Though others then pointed out the "low participation" in the internet for those countries.) And, of course, for the most part, when universal access comes up -- as it is just the international policy wonk version of Gore's "digital divide" -- the solution is inevitably some sort of subsidy, especially when the question is access for rural areas or developing nations.

There are any number of problems with such subsidies, and clearly, a minimalist, free market type such as myself can name dozens, but allow me, for the moment, to just mention a few predecessors, to help make an important point.

In 1898, to help subsidize the Spanish American War, Congress assessed a free on telephone lines. It was allowed to lapse for a while between the rebellion in the Philippines ending and the beginning of World War One, it lapsed again in 1924, but was renewed in 1932 to help fund programs to stop the Depression and since then it has been a part of the US telephone landscape, at least until, at long last, it was partially (though not fully) repealed in 2006. In other words, a tax for the Spanish-American War (or if you want to be generous, to fight World War One or to end the Depression) lasted until 2006, and continues, in a reduced form, still.

The Rural Electrification Act was enacted in 1936 to bring electricity to the, then, unelectrified countryside. Guess what? It still exists. Supposedly "rural" electric companies, in fully electrified areas, are still receiving subsidized loans under this plan. Now, I admit, there may be some very remote areas still insufficiently electrified, but, for the most part, they are not the focus of this program. Instead, it is a source of cheap finance for those who can technically qualify no matter how remote they may be from the original intent.

I could go on, listing mohair buying programs, strategic helium reserves and so on. And each, in its time, was addressing a valid concern. Now, I still think these concerns could probably have been addresses in a more market friendly way, with less intervention, but at least, at the time, there was a justification for the program.

But not now.

And that is the problem. A program, once created, takes on a life of its own. It develops a group of people who earn their living from it. Government workers, beneficiaries, people who provide services to beneficiaries and so on. They have a strong interest in keeping it going, while budget cutters usually ignore these programs, as they are, individually, small expenditures. And thus, these programs tend to continue forever, even long after the justification is gone.

Which is what scares me about universal internet access. Imagine that justification going on forever. Imagine how much it could cost to make sure the most remote part of the world has access equal to the most cutting edge service anywhere. And imagine it continuing forever.

That is a frightening prospect.

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