In the six plus years I have been associated with this industry I have noticed on thing that can always be counted on. With the possible exception of spam, ISPs/WISPs will have differing opinions on just about everything from which email software to use to whether to support MuniWireless projects.
Here is one of the few issues we can all uniformly agree on, the Universal Service Fund. There seems to be one uniform feeling by everyone in this industry towards this money grab, we all despise it and want it dead.
Today, I find the FCC is finally going to take a hard look at this in an Open Commission Meeting on Thursday, May 19th, apparently not realizing that the latest Star Wars episode will be opening that day and most of America will be taking the day off!
All kidding aside, this is a very serious subject, one that every single one of us needs to become deeply involved with. For years it has been suspected that the Universal Service Fund was being used to “cross support” DSL in effect using all of our money to compete against us.
My wife and I attended a Vermont Public Service Board meeting a couple of years ago where a Verizon representative candidly admitted that Verizon sells DSL at well below their cost. Why, in the name of everything that is holy in business would any business sell a product or service at below a company’s real cost? In the semiconductor business or the steel industry this type of behavior is considered “dumping” and would usually lead to sanctions against any company found guilty of engaging in such action. Yet the ILECs are given a free pass.
There have even been well documented cases of the ILEC selling DSL to the end user at a lower rate than the sell it to CLECs at wholesale! Why is this? We can only assume that the powers that be are so convinced that broadband is important that they are willing to overlook not only bad business practices but also what could be construed as illegal behavior. I would submit that this is very short-sighted thinking at the best. If this type of anti-competitive business practice is allowed the net result is that independent businesses that would normally provide competition will not be able to get a foothold and we all lose in the long run.
Great, thank God they’re on our side!
What would happen if the Universal Service Fund was withdrawn? Can we predict the real effect this might have on the telecommunications industry? We can certainly draw the conclusion that the lose of this kind of revenue would have a direct effect on their business model, one that would have some pretty far reaching consequences.
How will this affect Verizon’s deployment of fiber (Fios) or SBC’s deployment of VDSL? What does this mean for rural telephone service in many places where there are simply not enough customers per mile to provide service profitably? What kind of financing mechanism would we need to put in place where we can still supply telephone service in places like Victory, Vermont even though the residents there will never even begin to pay for the cost of maintaining the infrastructure that carries service to them? Now something needs to be said that in order for someone from elsewhere in the country to be able to call Victory, Vermont (hey, it could happen) the network must reach there but is the entire country willing to pay the extra money to supply service to the hundreds of thousands of locations that need to be subsidized in order to get service?
One thing that comes to mind is that the ILECs will have to make some really tough choices in order to continue with their plans if the USF gets discontinued. The first thing they would have to do is stop selling services (any services) at below their cost. This means the retail price of DSL will climb to where the competition has set the price point at. Cool, free enterprise and market competition can now move forward as they were meant to.
As to Verizon’s plans to roll out fiber or the rest of the ILEC’s plans to “modernize” their network infrastructure the cost would have to now be carried by the revenue they earn – just like everybody else. They could now court investors, present a solid business plan and convince the potential investors that they have a sound (not to mention) profitable strategy, one that an investor should feel comfortable investing their money in. Considering how well they have been able to do this in the past leads me to think they might have a little problem convincing anyone to believe them – but that’s me, I’m cynical.
Could this be one of the first solid indications of the course Commissioner Martin plans to steer the FCC? Is it possible that we might finally be seeing the FCC adopt the Fast Fail policy? Are we finally seeing a dawning of an era where the telecommunications industry is finally going to be allowed to have real competition?
I don’t know.
I do know that if every single one of the people I have heard bitch about the USF write one letter, makes a single telephone call or sends one email the FCC just might get the message how much we all feel the USF is nothing short a menace.
One more thing I know, the FCC isn’t some nameless, faceless government agency, they are a group of people who have repeatedly reached out to us in an attempt to get feedback from us. It is our responsibility to provide that feedback or they will never understand how we feel.
You said you wanted change. You said you wanted the USF to be discontinued. This is your chance, your big chance to get what you said you wanted. But, like everything else in this world, you must work to get what you want.
Here’s a list of email addresses for you to write to:
Chairman Kevin J. Martin: KJMWEB@fcc.gov
Commissioner Kathleen Q. Abernathy: Kathleen.Abernathy@fcc.gov
Commissioner Michael J. Copps: Michael.Copps@fcc.gov
Commissioner Jonathan S. Adelstein: Jonathan.Adelstein@fcc.gov
Here is the FCC’s mailing address for those of you who prefer the US Postal system:
Federal Communications Commission
445 12th Street, SW
Washington, DC 20554
Here’s the FCC’s 800 number:
And here’s a piece of advice – take a few minutes out of your busy day and DO SOMETHING!