March 18th, 2013

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I keep having the same conversation . . .

Rural people: Why do you think carriers won't serve us if we deregulate?

Me: Let me flip that -- it cost more to serve you than they can possibly make. Why would they serve you if they didn't have to serve you?

Rural people: But we pay money.

Me: These companies can make more money selling the copper for scrap than they can make in 10 years serving your community, because you have low population density and you are dirt poor. You are not 'desirable customers.' Sorry. This is not a reflection on your character. It is brute force economics.

RP: But the companies say they will invest in technology to make it cheaper to serve us, and there will be competition.

Me: OK, companies invest to make money. It would cost much more to pull fiber or bring wireless to your community than these guys could ever hope to make back. And 'competition' only happens where firms hope to make money. As I keep pointing out, there is no business case for serving your community. For one thing, you have what engineers call "terrain." Trees, mountains, stuff like that, that makes it expensive to bring even wireless out to your community. Heck, a lot of you can't even get satellite.

And if the phone company did spend that much, could you afford $100+ service package for cable, broadband and voice? No. Then they will not waste their time. They will bring all that good stuff to me and the other urban dwellers. But you all will get diddly, because that is how eonomics works.

RP: Then why do they serve us now?

Me: They serve you now because of Carrier of Last Resort (COLR) regulation, which means they can't serve the rich urban areas without also serving the poor urban areas. You want to deregulate and repeal COLR. Which will probably save me in the urban area money, since I will no longer be paying for the expensive rural systems like you.

RP: Oh.

Me: Yeah. Oh.