[opendtv] Re: FCC seeks comments on means testing for USF recipients
- From: Craig Birkmaier <brewmastercraig@xxxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Fri, 02 Jun 2017 08:03:50 -0400
On Jun 1, 2017, at 1:44 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx>
FCC is requesting comments on how to more intelligently provide USF subsidies.
This seems more reasonable than some recent proposals. It seems that some
wealthy people today, who happen to love in the boonies, are being subsidized
by the USF.
And if you had read the chairman's comments when he launched the proceeding
that is looking at the entire USF program you would have already seen that Pai
wanted to look at means testing. I even pointed this out in one of my posts.
"In 2006, former FCC Chief Economist Thomas Hazlett observed that while
high-cost subsidies 'may enable some operators to offer prices as low as
those paid by urban and suburban residents for service that is much less
costly to supply, the lower prices are offered to all residents, rich and
poor alike.' And a 2013 paper by Thomas Hazlett and Scott Wallsten stated
that '[t]he consensus among economists' is that the high-cost program is
inefficient because 'poor urban consumers pay significant telecommunications
fees to subsidize affluent phone customers in Aspen, Colorado and Jackson
Yup. We are talking about the high cost program here - now called the Connected
America Fund. Wallsten is absolutely correct on two levels.
The high cost rate floor issue is specifically related to POTS service. The
reality is that this subsidy is no longer needed as the rural POTS
infrastructure is already in place and paid for. Thus many rural POTS customers
are being subsidized by urban POTS customers - part of that $17/mo I have been
paying for my POTS service which is twice as expensive of the subsidized rate
The Connected America Fund is now being focused on broadband in rural markets.
THIS DOES require new infrastructure that is expensive, ESPECIALLY using
wireline technologies. This FCC review will look at the subsidies for broadband
that are being provided to customers who are both willing and capable of paying
for their service...
"Can't be without the Internet while on those Ski vacations to our cabin in
On one hand I feel their pain, as I have probably paid more than a thousand
dollars into the USF over the past three decades. On the other, they have paid
into this fund too, so why should they not be even "more qualified" to receive
a subsidy on rural broadband?
Redistribution economics are always troubled by issue like this.
So once again, even though Craig hasn't figured this out, the FCC
acknowledges that urban and suburban service (phone and broadband) is "much
less costly to provide" than rural service. They are seeking comment on how
to implement this means testing.
That is your conclusion. It cannot be justified for POTS service, which has
already been subsidized and built out. It may be justifiable for broadband.
Possibly, the idea of lowering the rate floor is part of this proposal. The
"rate floor" would be raised considerably for people such as those in Aspen
ski resorts, and lowered for those below the poverty level. As opposed to
lowering the rate floor so that the entire USF program becomes unworkable.
You don't even understand what is in play here Bert. NOBODY is talking about
LOWERING the rate floor. It was scheduled to increase this year and again next
year. All that Pai did was freeze it at the current level during this
The net result is likely to be something like the following.
1. The high cost subsidies for POTS service will be phased out completely. No
means testing will be needed as the subsidies will go away.
2. Those who still need subsidies for POTS service will be covered under the
lifeline program which is already means tested.
3. A new process for allocating USF funds to rural broadband will be addressed
in the rule making.
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