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Friday, January 16, 2009

Cellular Socialism
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A regular communist--I mean, columnist--for the Toronto Star, Canada's largest daily newspaper, asks in an op/ed: "Is a cellphone a basic human right?"  Shockingly, her answer is... yes!

She's green with envy that, for once, the U.S. has out-socialism-ed Canada (the land of polite, democratic socialism) with SafeLink Wireless, "a program that provides eligible people with a free cellphone and 68 minutes a month of free airtime for the period of one year. It includes texting, voicemail, call waiting and caller ID."

SafeLink was the brainchild of Miami-based TracFone Wireless Inc., the largest prepaid cellphone company in the U.S. As a purely prepaid provider, TracFone has always aimed at the market's lower end.

"A telephone service, just in general, is not a privilege, it's a right, and we feel it's a corporate responsibility to provide it," says José Fuentes, TracFone's director of government relations. "Everyone should be in contact, should have the opportunity to get a phone call, especially if it's an employer."

Someone might want to tell the saintly José that his company isn't offering SafeLink out of the goodness of their collective, corporate heart, or because they feel a moral obligation to do so.  Nope, they're sucking at the teet of the FCC's great hidden welfare fund:

SafeLink is subsidized by the FCC's Universal Service Fund, which requires all phone companies - or their customers, if they pass it on to them - to contribute via a monthly $1.25 to $1.50 addition to their bill, like the new 25-cent 911 fee in Canada. The fund reimburses TracFone $10 of the $13.50-per-user monthly cost.

I'd bet good money that SafeLink will make a lot more than $3.50 per user each monthly by sellingadditional airtime.

One might think that subsidizing cell phone service is good public policy.  Indeed, direct subsidies probably do less to distort the market than, say, requiring private companies to cross-subsidize free service for some users at the expense of others.  But, please, if you're going add to my cell phone bill for your pet welfare projects, spare me the sanctimonious nonsense about cell phone service being a "right" like, say, life, liberty or the pursuit of happiness. 

William Graham Sumner's classic essay leaps to mind:

As soon as A observes something which seems to him to be wrong, from which X is suffering, A talks it over with B, and A and B then propose to get a law passed to remedy the evil and help X. Their law always proposes to determine what C shall do for X or, in the better case, what A, B and C shall do for X. As for A and B, who get a law to make themselves do for X what they are willing to do for him, we have nothing to say except that they might better have done it without any law, but what I want to do is to look up C. I want to show you what manner of man he is. I call him the Forgotten Man. Perhaps the appellation is not strictly correct. He is the man who never is thought of. He is the victim of the reformer, social speculator and philanthropist...

posted by Berin Szoka @ 11:26 PM | Communications , Universal Service , Wireless

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