Why Is The FCC Subsidizing The Least Efficient Providers Of Rural Telco Services?
from the questions,-questions,-questions dept
The Universal Service Fund (USF) is a huge boondoggle for telcos, who keep getting more and more money out of it, with almost no oversight into what's done with that money. And, the way it's set up, it actually blocks more innovative (and cheaper!) services from being used to improve connectivity in rural areas. It's good to see others are beginning to notice this. News.com is running an article from Gregory L. Rosston at Stanford who points out that the USF rewards companies for being the least efficient providers. That is, by showing how much more it costs the telcos to provide for rural users, the FCC grants them even more money. In other words, the less efficient they are, the more money they get. Not exactly the type of incentives the FCC should be setting up -- but given FCC chair Kevin Martin's super chummy relationship with the telcos, perhaps it's no surprise.
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The Rip Off by bobbknight on May 12th, 2008 @ 3:09pm
The USF is and has always been a rip off.
Articles about the lack of oversight abound.
But look at all the other sink holes of Government collected cash, and people are surprised by this one?
This is the biggest reason I went VOIP.
Thats why I have always liked the idea of a simple majority in congress being able to lower taxes, and a supper majority needed to raise taxes.
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WTF!! Is A Telco?!?! by GHynson on May 12th, 2008 @ 3:44pm
Heh,
I havn't used a Telco since broadband internet.
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Re: WTF!! Is A Telco?!?! by LOL on May 13th, 2008 @ 7:09am
Do you have a Cell Phone? Do you use the internet? Don't kid yourself, somewhere along the line you're using a telcos equipment and they're getting a slice of your money.
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USF by Justin Lorry on May 13th, 2008 @ 9:55am
This program has been around since the 80's. Kevin Martin has proposed to eliminate most of the subsidy by wanting to hold a reverse auction so that only a "carrier of last resort" that wins the auction gets the subsidy. The winner would basically bid to provide service for the least amount of government subsidy. That sets the right incentives.
Unfortunately, the Democrats (Adelstein and Copps) want to continue the subsidies to all. Oh by the way, Gregory Rosston at Stanford, was an FCC economist during the CLinton years who also supported keeping these subsidies and even expanded the program to include all the schools and libraries in the United States.
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Re: USF by Don't Let the Monopolies Fool Ya on May 14th, 2008 @ 7:33am
Reverse auctions with one winner per area don't "set the right incentives" unless you're a very large carrier serving many low-cost/high-profit urban areas, like Verizon. Verizon has hired some Senators' former aides to lobby them hard, so as to keep all USF subsidies only for incumbent wireline carriers that have been "on the dole" for years. Unless you have those deep pockets, you're not going to win a reverse auction. With auctions, consumers in those rural areas would end up right where they are today: at the mercy of a single monopoly landline provider, with no wireless option, no other landline option, and no competition to bring down prices and expand the array of available services.
Rural consumers deserve the same services as their urban cousins. Wireless and broadband bring jobs, and wireless E911 brings better public safety. Don't our citizens deserve roadside emergency medical help regardless of whether they live in Montana or Maine, Oregon or West Virginia... or Boston or New York City? Representatives of rural areas should be interested in this matter. Wireless is a much less expensive way to bring economic development to less populated areas, but it still costs real dollars, and the FCC is trying to ensure that only Martin's chummy landline friends get that buildout funding. But more and more consumers are "cutting the cord," and ignoring the fact that people increasingly want the new technologies is like an ostrich sticking its head in the sand, or like those who denied the Internet was going to be big.
Stop the anticompetitive subsidy hoarding, I say, and let all of the technologies have their fair share if they can prove that they're using it for actual, efficient rural buildout and rural operations. Reward efficient providers, not those whose expenditures are high: you'll get more mileage out of it.
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Still Subsidizing Grandpa's Technology by Out with the Old on May 14th, 2008 @ 7:41am
I've got no problem with dollars going to wireless and broadband to improve our telecom network, but why in the world is the government still paying companies to deliver just voice over twisted copper? At least make the companies deliver broadband for those dollars. Seems backwards to me, as if we're supporting horse-and-buggy companies in the jet age.
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If You Care, Do Something by For Pete's Sake on May 14th, 2008 @ 7:54am
Griping about these problems with USF is fun, but it would have more effect if you contact the Senate and Reps for your area. They do notice if they get a lot of letters on a subject from their voters. If you care, write a concise, level-headed letter or email, not ranting, just stating your points and reasons why. Or call. You can look up your Senators and Reps and their contact info here: http://www.senate.gov/general/contact_information/senators_cfm.cfm
This will do a lot more good than all the blog responses you might post today.
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