Monday, February 7, 2011

FCC, Internet and Universal Service

The FCC Chairman released a comment today seeking to dismantle the Universal Service Fund which in effect pays for Rural telephone companies, typically 250% of their profit, ie a subsidy. He states such things as:

Roughly one-third of Americans aren’t online – that figure is under 10% in Singapore.

Has he ever been to Singapore, I have, it is an organized highly dense autocracy. This statement is like saying that 99% of the people have to walk more than 50 miles to get a subway! Yeah, yah think! Singapore is a city state, we in the US are a massive country! Still lots of trees.

He then focuses on the USF:

Today, I want to focus my remarks on this initiative to bring USF and the related Intercarrier Compensation system into the 21st century.

Universal service has been at the core of the FCC’s mission since the Communications Act of 1934 created the agency with the commitment to make vital communications services accessible to all Americans.

The program has helped connect virtually every American to our 20th century communications grid, first bringing basic telephone service to places where there was no economic case for service, and then extending the benefits of mobile phone service to more and more areas across the country.

Universal telephone service helped spur American success in the 20th century. Small business in our smallest towns suddenly had the country – and later the world – open up to them. Universal service brought new life to Main Streets, driving commerce in all reaches of our land. And it strengthened communities, tying friends and families together.

In 1997 I wrote a paper addressing just this issue. It is worth a re-read. I was opposed to the USB then and even more so now. It creates a cash flow for rural entities that in effect tax those in the cities so that those in the country can get near fee phone service but that the operators make tremendous profits in many cases!

He continues with the obligatory sob stories:

Americans like the 17-year-old girl in Alachua County, Florida who’s doing her homework in the parking lot of the local library at night, because her family can’t get broadband at home and the library’s hot spot is her only option.

Americans like the residents of a rural community in Georgia that was being considered by a major airline as a site for a call center. Those jobs could have replaced some of the ones that left with the shuttered textile mill. But the airline eventually passed because the community didn’t have adequate broadband access.

People make choices. They chose to live in rural areas, we manage Internet access to libraries and schools, but they resort to parking lots. I am certain there is a great deal more to that tale. I have seen towns in New Hampshire where people moved from New York because they want the solace and then complain that they cannot have 100 Mbps broadband at low prices! Where is the logic. People choose, they choose to live somewhere, they can choose differently, they can live where broadband is. We as a society do not have a duty to fund equality of access to those who made a personal choice which economically made the cost to them a higher one.