My mom is flying into Denver today to see her 3-year-old granddaughter, (and the rest of us, too, I suppose.)
Luckily, there is a direct flight from the small North Dakota town where she lives to Denver. Last month, I was worried it may not always be so easy for her to come visit when I heard the United Airlines subsidiary serving Williston plans to pull up stakes. Fortunately, Williston is guaranteed to have daily air service under the Essential Air Services subsidy for rural airports.
Great Lakes Aviation, the United subsidiary that wants to pull out, said enough people are using the service, but it still isn’t profitable.
So the government either will have to up the subsidy it pays to Great Lakes, or offer enough of a subsidy to a new airline carrier to entice that company to offer service. However, at least two other airlines already have tried to offer service in Williston and both decided the service wasn’t profitable enough and left.
(Before you start listing all the problems with federal subsidies, let me point out mass transit systems in urban areas also receive federal funding.)
What does any of this have to do with wireless?
Nothing, except the underlying principle.
The Federal Communications Commission this summer is set to figure out rules for how to divvy up federal subsidies to telecom carriers offering phone service to rural areas. Universal-service policy will help determine whether wireless operators can evolve as competitors to wireline telcos as envisioned by the ’96 telecom act.
Like transportation, communications is essential to a good life.
But because the business plan is difficult, PCS licenses in rural America are not being sought after in the C-block re-auction. Some carriers, like Western Wireless Corp., are braving the regions with few people to try to offer niche wireless services.
These carriers must be allowed to compete for federal subsidies if rural America is going to see some of the same innovation urban America will enjoy. But the subsidy model has to be right the first time. While a new airline carrier might be able to pick up service where another carrier left off in rural America, it won’t be so easy with telecom service. Different technologies, different vendors and different business strategies certainly could impede those plans.
So it has to be right the first time.
Like airline service, grandmothers and granddaughters will depend on it.
