> An explicit tax on the company by the local government would still be better than a build-out requirement, since this would at least be transparent.
I guess I don't quite see how it's more transparent. What information would it provide, and to whom, that the current system obscures? And is the issue whether we call it a "tax" vs. "build-out requirement", or is the issue what is being taxed (land use vs. revenue from local customers vs. ...)? I can't picture what such a tax would look like, how it would really differ from the status quo, and why it would result in better service -- walk me through it.
> But even if you want to transfer money from someone to the poor, and (perhaps unethically) you want to take it from someone who's not a voter, it still makes no sense to pick on this particular company. Why not tax any of the other non-voting companies that service a locality? Say, the tax on coca-cola?
Well, I take it that there are some relevant differences here, as qq66 pointed out. Internet access is infrastructure, and increasingly, it is essential; access to Coca-Cola is not. I think the government has some obligation to avoid creating a disparity between haves and have-nots for infrastructure like this. It's not the only consideration, but that is one reason build-out requirements are appropriate for broadband companies, while not for soda vendors.
Also, this infrastructure often has to be built on public land. It's the government's job to make sure that land is managed well for an indefinite period into the future, presumably well beyond the life of whatever cable is being laid down. This is why it's appropriate for the government to demand more oversight of these companies in general, whether that comes in the form of build-out requirements, a fund for cleanup fees, or whatever. A story I've seen again and again is public land rights being granted to a private company, which subsequently damages the land and then tries to stick the public with the bill. The government has an obligation to protect public interest in the land and avoid that kind of situation. Again, it has no such obligation with respect to many other businesses: Coca-Cola doesn't need land rights to sell bottles in private stores, so that kind of oversight is not appropriate.
> I guess I don't quite see how it's more transparent. What information would it provide, and to whom, that the current system obscures? And is the issue whether we call it a "tax" vs. "build-out requirement", or is the issue what is being taxed (land use vs. revenue from local customers vs. ...)?
The transparency issue is that a build-out requirement isn't denominated in dollars. (There are other economic efficiency arguments, such as if the poor people would rather have the money than the cable connection, but I'm addressing your question on transparency.)
A cable company has much more expertise than a local government for what the long-run costs and potential profits are for a build-out requirement, and moreover they have a much higher incentives to apply their expertise to the local situation than a politician. If you institute a build-out rule, it does so without knowing the size of the costs; they are simply imposed silently. Any future public debate about revising the rule is enfeebled.
> I can't picture what such a tax would look like, how it would really differ from the status quo, and why it would result in better service -- walk me through it.
The company is charged $X per year to use public rights of way. The government hands this money to the poor people who can choose to buy cable connections or not. (If they don't, this is a sign that they have something better to use the money on.) If the government doesn't trust the poor people to use the money responsibly, then the government directly subsidizes their cable connection fees instead.
> Well, I take it that there are some relevant differences here, as qq66 pointed out. Internet access is infrastructure, and increasingly, it is essential; access to Coca-Cola is not. I think the government has some obligation to avoid creating a disparity between haves and have-nots for infrastructure like this. It's not the only consideration, but that is one reason build-out requirements are appropriate for broadband companies, while not for soda vendors.
You missed the point. I wasn't saying that we should have build-out requirements for soda, I was saying that if we use a tax instead, then we can take the subsidizing resources from anyone rather than just a company in the field whose customers we wish to help. This would allows us much greater flexibility in getting those resources in a non-distortive way.
> whether that comes in the form of build-out requirements, a fund for cleanup fees, or whatever.
A fund for cleanup fees is completely different idea, and indeed is generally economically sensible. (Clean up fees are about correctly pricing externalities. Build out requirements are about getting one group of people to subsidize another.)
> A story I've seen again and again is public land rights being granted to a private company, which subsequently damages the land and then tries to stick the public with the bill.
This has nothing to do with the topic. I've seen people litter all the time in public spaces. Should I institute the loud-car ban because some people have littered in the past?
Whoops, I wrote this in haste but now it's too late to edit. The last sentence referred to an analogy that I decided didn't work. I would say: just because I've seen people litter all the time in public places doesn't have much to do with the badness (or non-badness) of economically inefficient/opaque methods for correcting other bad externalities.
> The transparency issue is that a build-out requirement isn't denominated in dollars...If you institute a build-out rule, it does so without knowing the size of the costs; they are simply imposed silently.
OK, I think I see.
> The company is charged $X per year to use public rights of way. The government hands this money to the poor people who can choose to buy cable connections or not. (If they don't, this is a sign that they have something better to use the money on.)
But I'm still having trouble seeing how this scenario improves on the original problem.
I thought that local governments were already charging $X for uses of rights of way, and build-out requirements are in addition to this. So if I understand right, the idea is to charge more (say $(X + Y)) but not impose those requirements, and instead let the broadband companies decide where and when to build out; then distribute the excess $Y (and, possibly, funds from elsewhere) to subsidize Internet service for the poor.
The problem I see here is that, if I'm one of those N poor folks the broadband company decides it doesn't want to build out to, I'm out of luck. I don't even have the option of buying broadband service, and offering up my $Y/N dollars does not give me much leverage to change that. If enough of my neighbors got together and pooled our funds, maybe that would be enough to convince the company to build out to our neighborhood, but maybe not, especially if (1) the company has already decided our neighborhood isn't worth it, or (2) building out would require the company to pay more in right-of-way fees (though maybe this is included in the initial $X+Y price?).
In short, it seems like our government trades the relatively strong leverage we have as a collected political force for the relatively weak leverage we each have as individuals, plus $Y/N dollars apiece.
In this particular case, that does not sound like a good trade, for the reasons I mentioned: Internet access is more or less essential infrastructure, and there is public interest in having nearly-universal access to that infrastructure, rather than a class of haves and a class of have-nots.
I wouldn't think it's that the government doesn't trust the poor (or really, anyone not yet built-out-to) to spend this money on responsibly. Rather, it's that divvying it up and letting individuals make their own decisions on how to spend it sacrifices political and economic coordination, which is required in this case to serve a desireable public end, near-universal access. Solving coordination problems like this is a big part of why governments exist, and we shouldn't be rushing to give up that coordination for individual decision making. We can easily end up in a situation where we're all worse off that way.
I guess I don't quite see how it's more transparent. What information would it provide, and to whom, that the current system obscures? And is the issue whether we call it a "tax" vs. "build-out requirement", or is the issue what is being taxed (land use vs. revenue from local customers vs. ...)? I can't picture what such a tax would look like, how it would really differ from the status quo, and why it would result in better service -- walk me through it.
> But even if you want to transfer money from someone to the poor, and (perhaps unethically) you want to take it from someone who's not a voter, it still makes no sense to pick on this particular company. Why not tax any of the other non-voting companies that service a locality? Say, the tax on coca-cola?
Well, I take it that there are some relevant differences here, as qq66 pointed out. Internet access is infrastructure, and increasingly, it is essential; access to Coca-Cola is not. I think the government has some obligation to avoid creating a disparity between haves and have-nots for infrastructure like this. It's not the only consideration, but that is one reason build-out requirements are appropriate for broadband companies, while not for soda vendors.
Also, this infrastructure often has to be built on public land. It's the government's job to make sure that land is managed well for an indefinite period into the future, presumably well beyond the life of whatever cable is being laid down. This is why it's appropriate for the government to demand more oversight of these companies in general, whether that comes in the form of build-out requirements, a fund for cleanup fees, or whatever. A story I've seen again and again is public land rights being granted to a private company, which subsequently damages the land and then tries to stick the public with the bill. The government has an obligation to protect public interest in the land and avoid that kind of situation. Again, it has no such obligation with respect to many other businesses: Coca-Cola doesn't need land rights to sell bottles in private stores, so that kind of oversight is not appropriate.