Robert Bell has an editorial in the Daily Yonder this week on the impact the “telecom cartels” have on rural areas. Some folks may recognize his name from his work with the Minnesota Intelligent Rural Communities (MIRC) project; he is involved with the Intelligent Community Forum.

The U.S. tolerates a much higher level of inequality in broadband distribution – as it does in most social matters – than most industrialized nations. Market forces rule, and markets where providers can make lots of money win out over thinly populated regions that cost too much per user. Most other industrialized nations try to make up the difference with public spending, but that still runs against the grain in America.

This would not matter much, except that it leaves people in rural places at the whim of economic cartels, as I learned vividly during my workshop. The City of Lafayette has exceptional broadband because it built a fiber-to-the-premise network beginning in 2004. Its reward was the chance to fight a $4.5 million legal battle with incumbents to win the right to compete and deliver a network.

Since they failed to shut down the city, the incumbents went to the legislature, where they succeeded in guiding the Local Government Fair Competition Act into law. It should have been called the Cartel Protection Act, because the law blocks every other Louisiana municipality from owning and operating a network offering service to the public – which effectively frees the incumbents not to compete where they don’t want to.

By rights, telecom providers should be the best allies of Intelligent Communities, which are communities that have taken conscious steps to prosper in a broadband economy. I salute those telecom companies with the vision and courage to be exactly that. But so many of them seem to prefer the economics of the cartel. When the guys with the money can also control politics to protect their interests, progress stops. Or it would if the cartels had things all their own way.

His points are interesting. I might bump up his concern to ask policymakers to look at what happens when communities are left hostage. Some telecoms are great and play part in the economic development plan; some are not. But in the spirit of marketplace freedom communities should be able to step up and provide services not provided by the private sector without risk of litigation.