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Cyber/virtual/e-school/online charter schools are of particular importance to rural schools in many states. This study investigates how cyber charter school competition is experienced and understood by rural school leaders in one highly impacted state. Our analysis suggests that rather than spurring innovation and improvement, cyber charter competition in rural areas creates financial crises that threaten rural district viability while generally failing to generate the competitive benefits predicted by market theory. The findings contribute to understanding competitive mechanisms in education by demonstrating how rural geographic and economic contexts shape competitive dynamics in ways that contradict fundamental assumptions of fairness and place-neutrality underlying charter school policy.