broadband subsidies — has a powerful pull: It uses a tactic, sometimes referred to as a motivational Zeigarnik effect, that persuades people to resolve what they feel are incomplete tasks independently of the underlying value of the result. Economist Hal Singer recently paired this tactic with an egalitarian appeal of “broadband access for all” to further advocate for subsidies. But do more subsidies actually finish a job and provide a net benefit? Apparently not. Customers’ spending habits are telling us they have other priorities. Furthermore, people advocating more subsidies for broadband tend to ignore how inefficient the subsidy programs are and exaggerate the benefits of subsidized broadband.
agenda promises to “finish the job of connecting every household in America to high-speed broadband.” How? Largely by taking money from taxpayers and funneling it to people who promise to expand broadband. In some universe, it might be possible to make the world a better place by taking money from businesses and consumers who were using it to produce wealth and value and putting that money into something that people are otherwise unwilling to pay for. But in the world in which we actually live, Clinton’s plan is likely to waste resources and make our economy worse for the experience.
dropped a telecom bombshell: the agency’s Lifeline program, much venerated in Washington circles but often derided outside the beltway, may be wasting nearly $500 million annually on fraudulent accounts. This announcement should be alarming, given the FCC’s extensive efforts in recent years to reduce waste in the federal universal service fund. It should also cast doubt upon the wisdom of the agency’s 3-2 vote earlier this year to expand the program without hard budgetary limits, rather than designing a new universal service system to serve the broadband age.