An Urban's Rural View

Among the many crying infrastructure needs of rural America, broadband internet ranks high. Farmers need it. Small businesses need it. Students need it. Without it, the countryside cannot thrive; it may not even be able to survive. Yet large swaths of rural America -- 40% by one estimate -- don't have it.

No one should have been surprised, then, that on President Donald Trump's trip to Iowa the other day, he promised to provide it. "We know that Wall Street wants it very badly," he said, "but you know what else? The farmers also want it. And you're going to have it." (http://tiny.cc/…)

As encouraging as those magic words sound, they leave two important questions unanswered: How? And when?

The reason high-speed internet has been so slow in coming can be summed up in a single word: money. The cost has been estimated in the hundreds of billions of dollars. Step one towards realizing this promise is identifying where the money will come from.

Campaigning for president on a promise of spending a trillion dollars on infrastructure, Trump talked of public-private partnerships. In these arrangements, private investors put up most of the money and are paid back in fees, tolls or consignments of tax revenue.

As I pointed out in a previous post, public-private partnerships might solve some of urban America's infrastructure problems but they're ill-suited to sparsely populated areas (http://tiny.cc/…). The revenues to pay investors back are insufficient.

The president has hinted he's aware of the limitations of these partnerships and might make an exception for rural projects. But is he really willing to shell out hundreds of billions in federal grants to bring broadband to the unserved 40% -- and can he get Congress to go along? If not, what is his plan, and when will he unveil it?

In 1974, meeting with Ford administration officials, the economist Arthur Laffer sketched out the basic idea of supply-side economics -- that lower tax rates can yield higher tax revenues -- on a napkin. Within a few years, the Reagan administration had pushed through tax cuts that codified the Laffer Curve in law.

When it comes to a plan for funding rural broadband, the president has yet to demonstrate he even has anything sketched on a napkin.

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On the well-tested theory that a watched pot never boils, I'm heading off to Japan for a couple of weeks. Maybe while I'm away the president will unveil his plan. We can always hope.

While in Japan I may or may not find something to write about. If not, please bear with me; An Urban's Rural View will return when I do.

Urban Lehner can be reached at urbanize@gmail.com

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