No panacea for rural America

Deregulation. It became a political clarion call in the late '70s. You remember: Inflation was rising, and so was unemployment. The United States was perceived to be losing its competitive edge in world markets. American business was said to be tied in knots by government regulations.

The call was to cut regulations and red tape. ''Let the competitive market system work its will,'' they said. If firms were allowed to compete freely, prices would be lower and service would be better. Let the strong survive and prosper with deregulation, let the weak firms fall, and we would all benefit.

Industry after industry demanded the benefits of deregulation as the politics of deregulation took root. And in the past five years, industries were put on the deregulation path. Natural gas. Airlines. Telephones. Intercity bus service. Trucking. Brokerage houses. Freight railroads.

But deregulation has not worked as simply and effectively as promised. It was packaged, streamlined, simplified, exaggerated.

As the dust settles we see some big economic interests riding the deregulation wave in a direction that does not appear to serve the consumers' best interests.

* The land-grant railroads, under the cloak of deregulation, are considering the abandonment of 155 branch lines, covering almost 3,000 miles of track in 22 states, over the next three years. These lines provide a necessary service for hundreds of small towns and thousands of farmers, elevator operators, merchants, manufacturers, and workers across America. The branch lines being abandoned are almost exclusively in rural areas.

* Deregulation in the telephone industry has justifiably frightened millions of Americans. Long-distance calls will drop an average of 11 percent in price. About 80 percent of all long-distance calls are between 18 large cities. Meanwhile, costs of local and intrastate toll calls will soar as $5 billion borne previously by long-distance callers will be transferred to local and intrastate service by 1990, according to FCC estimates. Rural customers in many states will see their monthly telephone bills triple or quadruple in a few years. This will threaten the concept of ''universal service'' and, unless checked by congressional action, could price telephone service out of the reach of the rural poor and elderly.

* In the first eight months of intercity bus deregulation, a net of 291 communities in 21 states (of 37 states surveyed) lost bus service entirely. Abandonment has been proposed in 240 communities and 227 communities in 15 states have lost half of their previous service.

* Weekly airline departures from large cities rose 5 percent in the first four years of deregulation. In the same period, weekly departures from small towns dropped 12 percent. As smaller planes were placed in service in the small towns, weekly departing seats dropped 22 percent. And 73 small airports lost service entirely.

There have been some benefits from deregulation, but they have gone largely to the population centers, while the costs have gone to rural areas. It's the same old economic cow - it feeds in the rural areas, but is milked in the cities.

This is unwise public policy when the small businesses of rural areas are dependent on basic, accessible transportation, and communication services. We long have known that services to sparsely populated areas cost more than in cities. We have accepted that services in rural areas are necessary, even if it meant spreading the higher costs to all areas.

Deregulation was supposed to make businesses more efficient, not cut off services. Washington got so caught up in the rush to deregulate, it forgot that millions of people live out there in the rest of the country.

The reaction to the abuses of regulation was timely and legitimate, but now we need to begin looking for a little balance.

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