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Friday, January 20, 2006

As James Would Say, "It's the Consumers, Stupid!"
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The Coalition to Keep America has attacked the PFF DACA Universal Service proposal. Ray Gifford has offered one quick response here, in "Hysteria is the sincerest form of flattery...."

I'm in Europe now and haven't read the Coalition's paper yet, only the first page. As Ray said, a full response will be forthcoming. But the following sentence from the the second paragraph immediately caught my eye: "Rural investment may or may not be economically efficient, but that is (fortunately) not a requirement for good public policy." A position that denigrates economic efficiency right at the very outset evidences a deep misunderstanding concerning how economic efficiency enhances consumer welfare. A position that specifically delinks economic efficiency from sound public policy right at the outset should be a red alert that someone's special interest is being protected--not the consumers' interest.

Writing this from Europe, where it is fashionable in many countries and here in Brussels as well to speak ill of economic efficiency and speak well instead of "good public policy", growth is on a flat-line. The Europeans who understand that the US growth rate of 3-4% sure beats flat-lining are looking for new ways to achieve greater economic efficiency.

All of this is not to say, of course, that a universal service program does not have an continuing role to play in US telecom policy. The PFF proposal argues it does. It is to say, however, that it does not serve US consumers to try to maintain a system that is consciously economically inefficient when we can move towards one that is more economically efficient while, at the same time, keeping people connected with new and innovative services.

As James Carville would say, it's the consumers we're trying to protect, stupid! Not specific rural telephone companies.

posted by Randolph May @ 12:10 PM |

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