Blandin on Broadband

In an effort to be fair and balanced, I thought I’d mention a recent study by Cap The Fund Campaign, which found that 62 percent of Americans polled oppose a broadband build-out push funded by the Universal Service Fund.

Here’s an interesting quote from the article:

“The high-cost portion of the Universal Service Fund is now a seemingly bottomless pit of tax subsidy handouts that do little or nothing to help the consumers originally targeted for aid,” said Dee Hodges, president of the Maryland Taxpayers Association. “Experts say we could meet the mission of the USF and save billions in the process. In terms of transparency of government, [the USF is] completely out of whack. Many privately held rural telephone companies don’t have to disclose much about how much money they get or how they choose to spend it.”

Here’s the quick scoop for the few readers who might not be keeping up on USF. The fund was created to collect funds from telecommunications providers to subsidize providers in under-served areas. Traditionally it meant bringing phone service to rural areas, schools and libraries. It made sense because it’s more expensive to serve rural areas than urban areas.

A few years ago they stretched some definitions so that the USF also paid for Internet access – which was a super big boon to the schools and libraries. They also expanded the definition of provider to include cell phone providers too. With the explosion of cell phone use/purchase the fund has increased a lot.

The flip side has been that some providers have received funding to provide service in remote – but not disadvantaged areas. The example they use in the article is the community in Hawaii.

The catch is that the USF seems to be a good program that has as of late been poorly managed. And some people have jumped on the misuse to disregard the whole program. As taxpayers, I think we can all understand the frustration. But instead of throwing out the baby with the bathwater – maybe we could try cleaning up the water.