Time to end state telephone subsidies

“Don’t Wait by the Phone”

Oklahoma is sadly becoming a debtor state.  We have about 1.7 billion dollars in tax credits and exemptions along with the millions upon millions of dollars of subsidies we hand out every year while we have a hard time funding essential services.

Webster’s dictionary defines a subsidy as “financial aid given to a particular business or industry with the aim of serving an economic or public purpose.”  Those of us who believe in the free market generally don’t like subsidies because in theory, they are supposed to be used to keep costs down, but …like any addiction… subsidies lie by never delivering on their promise and in the end only cause harm.  Such is the case with Oklahoma subsidizing telephone service in certain rural areas of our state. This archaic practice has been going on for years and it is costing Oklahoma taxpayers upwards of $50 million dollars every year to subsidize a dying industry.

Here are the facts. How many folks use antiquated “land lines” anymore for long distance?  The answer is hardly anyone.  In fact, the estimates say that in Oklahoma alone, some one million of access lines no longer exist.  One million homes or businesses – and remember some of those 1 million homes have 2.5 persons living there so, with a population of 3.7 million the numbers become even harder to justify. The rural communities don’t even support these land lines anymore.  Everyone is using wireless service.  You can sign up for nothing and get a free phone to boot.

Surveys reveal that 40 percent of Oklahomans use wireless phones only and over the last several years, a 60 percent drop in usage of land lines has occurred. It’s hard to ignore if you’re paying attention.”

By subsidizing these companies that can never justify themselves, we hurt our taxpaying citizens here in Oklahoma.  Don’t get me wrong, obviously we need some land line service for hospitals, emergency and other essential services but we don’t need to be throwing good money after bad, especially in these years of budget shortfalls and increased essential core government costs. You have almost $50-60 million dollars going between two duplicative areas – the High Cost Fund and the Oklahoma Universal Service Fee for these companies – and that comes with little auditing of where the money is being spent.  The whole process is a mess and not what limited government really should be about.  As vice chairman of utilities, I always have to always ask myself, “Is the money being spent for its intended purpose?”  I think we should all ask ourselves the same question and hold our legislators accountable, because, after all, it is your money.

With the increased usage of wireless phones, texting and Internet calling, don’t we need to let the “free market” work and make it a fair playing field for every one? It always works – how many times?  Every time.  Some people who are not paying attention just believe the same old lie.  But subsidies don’t keep cost down – it is the free market that does.  Competition keeps prices low, and in turn quality goes up along with choices for consumers – Economics 101.  We need to create an even playing field for everyone in the process and hold folks accountable in the legislature and Corporation Commission to start addressing this issue.

One thing I have learned in my years in the legislature  – it’s like children – once government hands out money it is hard to take it back. They always expect it and more. Well, this is one area we need to examine and change. The facts demand it and it’s something to think about.