Perhaps it comes as no surprise that the U.S. Federal Communications Commission wants to create a new tax on broadband access services to support its Connect America Fund, essentially the replacement for the older Universal Service Fund.
Aside from the change of nomenclature, the emphasis has shifted from guaranteeing voice services in rural and isolated portions of the country to supplying broadband access services to such areas.
“What started as a program with important goals (making sure rural farmers can make phone calls and ensuring the poorest among us can dial 911) turned into an unaccountable corporate slush fund,” says S. Derek Turner, Free Press research director.
Today USF is an $8 billion annual program, nearly quadrupling in size since its inception, with the bulk of those revenues going to landline and wireless phone companies.
Maybe this massive growth would be no concern if USF were a model program with a sterling reputation for efficiency. “But it’s not,” says Turner.
One recent study found that 59 cents of every USF dollar raised for rural networks was spent on administrative expenses and general overhead. A 2010 audit of the rural USF program found that one out of every four dollars sent to participating phone companies was an “overpayment,” with nearly a billion dollars unaccounted for.
So some would argue that higher taxes are unwarranted.
Thursday, August 30, 2012
FCC Wants New Tax for Connect America Fund
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
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1 comment:
For all of us rural independent telephone companies that were in most cases built by farmers the money is not turned into an unaccountable corporate slush fund. The funds have been used for building out broadband networks to our customers. Our customers include farmers, manufacturing, ethanol plants and wind energy that happens to supply power to the west coast. Those networks require maintenance and electronic replacements to ensure that our cellular, farmers, residential and business customers have the services they need to supply the nation with engery and food. Yes we are few in numbers but we are important to the nation just as the urban areas are important to us. There are problems with the USF fund and they have corrected some of the areas that needed to be taken care of. I just urge everyone to make sure they understand what is at stake here and make sure that rural companies are not placed in jeporady. The FCC needs to take a step back with the programs they have implemented and make sure they understand the impacts.
Roxanne
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