The Last Mile in Rural Tech

Over the course of the last ten years, I have spent a lot of time in rural Midwestern and Southern America.  When we drive through small towns, we always wonder what the heck people do there to exist.  Many of those small towns were “factory” towns.  When the factories left the towns were devastated.

Another thing we have noticed is that rural areas are experiencing some of the exact same problems inner cities are. Drugs, out of wedlock babies, depression.  It’s real.  At least in the city, you can go to a library.  You can go and get a job by walking somewhere.  You have more of a chance in the city than you do in a remote rural area.

The Illinois Policy Institute has been running a series called “Forgotten Illinois”.  It profiles various areas of Illinois that are struggling.  They have been neglected.  Government isn’t going to provide any answers or solutions for these small towns.

When we drive through, we notice things.  Cell service is not good.  Most places don’t have good internet service.  The only reliable way to get good television is via satellite.  Good luck if you have bad weather.  One of the great things about the cabin we are rehabbing in a very remote area of Minnesota is that there is fiber internet.  Without it, I doubt we could spend much time up there.

The Wall Street Journal had a couple of interesting articles today.  One dealt with technology and rural areas.  The other was by Andy Kessler on basic income.  I have thought a lot about basic income.  It’s a bad idea and especially bad for people in rural areas.  Andy writes, “If last year’s presidential election proved anything, it’s that people want jobs, not handouts.”  If there is one thing that comes out in the popular book “Hillbilly Elegy” it’s that people don’t want the government in their lives.  They want a chance.  They don’t want to be looked upon as liabilities to be warehoused.

Basic income is only going to exacerbate the existing problems in rural America.

Arthur Brooks has written about similar things.  There is dignity in work and people want to participate.  However, we have to give them the tools to participate.  The internet is a must have in an information economy.  I think that blockchain and cryptocurrency can be game changers for people in rural areas.  There is a lot of cutting-edge technology that can make farming a lot more efficient but it needs a good internet backbone in place to achieve anything.

It’s intuitively obvious that the economics of delivering broadband to disparate people across a varied countryside is a money loser for existing providers.  The thing people fail to realize is that FCC regulations and actions have decreased the scope and power of competition.  Things like net neutrality aren’t even worth thinking about when there is no “net”.

Many supposedly “smart” people worry about how technology is going to disrupt a lot of jobs and put people out of work.  This has always been the case over the course of human history.  Except, we never seem to run out of jobs or problems.  While traveling by car during one of his many overseas travels, Professor Milton Friedman spotted scores of road builders moving earth with shovels instead of modern machinery. When he asked why powerful equipment wasn’t used instead of so many laborers, his host told him it was to keep employment high in the construction industry. If they used tractors or modern road building equipment, fewer people would have jobs.  “Then instead of shovels, why don’t you give them spoons and create even more jobs?” Friedman inquired.  That’s the same logic the supposed “smart” people are using when looking at technological innovation today.

If we want to make America competitive and create a lot of jobs, we need to give people who can create jobs the tools to create them.  The only way to do that is to increase competition among the big telecoms and internet service providers.  That will drive down the cost of service for everyone and spur innovation.  Some technical entrepreneur somewhere will have an incentive to solve this problem if the big telcos don’t.

The Wall Street Journal calls it “One nation, divisible”.  The only thing dividing us right now is piles of black and white ink on regulatory paper and really wrongheaded logic.  Get rid of that and a thousand flowers will bloom.