Commonalities: The R.E.A. and High-Speed Rural Internet Access

Abstract

This paper explores commonalities between the creation of the Rural Electrification Administration and the similar dilemma of providing an affordable infrastructure for high-speed Internet access in places where profit incentives do not exist. In the case of the R.E.A., the necessity for an aggressive federal initiative to wire rural America, where the market for electricity had failed, is revisited as the missing incentives are identified and explored. We then examine the incentive-poor similarities between rural electrification and rural high-speed Internet access through how consumers currently and prospectively gain access to broadband Internet service. The regulatory environment created by the Telecommunications Act of 1996 and the Federal Communications Commission is considered. Although the FCC is required (Section 254.b.3) to take regulatory measures to ensure comparable and affordable access to the Internet for all Americans, the historical similarities and comparative analysis of rural electrification and high-speed Internet access suggests the goal of universal service is unlikely to be met in the near future. Regulatory disincentives to build such networks are present, driven in part by market realities and in part by competitive restrictions in the Telecommunications Act of 1996. Finally, we pose the question of whether a federal effort equivalent to the R.E.A. is needed to ensure that residents of sparsely populated areas, like their predecessors in the 1930s, are not comparatively disadvantaged in the first decades of the 21st century. The paper concludes with a proposal to accelerate the deployment of broadband infrastructure in rural America.