Friday, September 03, 2010

Broadband subsidies to backfire?

That's one of the fears from some telecoms in Montana, where the federal stimulus package is trying to extend broadband connectivity.

The government is pushing larger users, such as hospitals and schools, to jump from smaller networks onto ones being built with federal dollars. Without those large users, or "anchors," in their customer base, smaller consumers on the existing networks face higher rates for high-speed service, he said.

And that's a neat illustration in miniature of how government subsidies can make things cost more for little people. I have a feeling that we'll see the same thing with healthcare insurance reform--only not in miniature.