The Free Market Road to "Vermont's Telecom Future"

Some of Vermont’s political leaders have set a goal of statewide broadband access according to a recent Free Press article.  Here is what is seen as at stake:

Senate President Pro Tempore John Campbell, D-Windsor, said he sees that as a key to creating jobs in the state. “Broadband is probably one of the single greatest impediments to the types of business that would flourish in Vermont,” he said.

Back in 1998 the Ethan Allen Institute’s John McClaughry wrote a commentary on “Vermont’s Telecom Future” in which he made this observation: “The beauty of the telecom business is that, in the age of the satellite and the internet, it can be anywhere. It will go where it can prosper, and where its executives prefer to live and raise their children. It will not go where government taxes and regulates it so that it cannot compete, or where government taxes too large a bite of its employee’s salaries.

Unfortunately the solution proposed to our lack of a sufficient telecommunication infrastructure does not include creating a more favorable business climate in Vermont that will attract the investments needed to build a broadband infrastructure.  As with most things, our state government has been part of the problem in this regards.  Here is what McClaughry had to say about the our political leaders’ effort on this issue: “This political game in Montpelier came at a real-world price. The telecom tax is burdening hundreds of thousands of Vermont households and small businesses, and threatening the growth of the clean, high-wage telecom industry in Vermont.”   The political game he refers to was the creation of an Act 60 sales tax on telecommunications in 1997.  Then Senate Majority Leader Peter Shumlim took part of a deal to gain support for Act 60 that resulted in a “completely new tax: a retail sales tax on everybody’s phone bills“.

Once again we have a case of our political leaders creating a problem that they then step in and propose to solve.