Telecommunications Policy

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The Universal Service Fund is one of those annoying lines on your phone bill that turns your $39.99 plan into at least 50 bucks a month. Essentially it takes taxes on interstate telephone service to subsidize telecom service for poor and rural areas, as well as broadband for libraries, health care facilities, and schools.

Unsurprisingly, payouts to phone companies are raging out of control, yet many rural areas still have notably inferior service:

The cost of the program has skyrocketed because of a bizarre funding formula which the FCC uses: the so-called "identical support rule." The agency calculates subsidies to smaller wireless carriers that serve rural areas based on the support that incumbent carriers receive per line, rather than on the actual costs of the smaller telcos. This has resulted in a dramatic rise in USF payments from $2.6 billion in 2001 to $4.3 billion last year.

Not to rush into anything, but it looks like the FCC may be thinking about maybe considering at some point reforming the system. Most likely this will just mean switching to subsidizing broadband instead of telephones.

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  1. …subsidizing broadbard…

    Broadbard? Do you mean this?

  2. Huzzah! Now I can afford me roast turkey leg. Want to see some juggling?

  3. Want to see some juggling?

    Yes! Yes I do want to see some juggling. Not that cheap gimmicky stuff that you run past the tourists either.

  4. Yes I do want to see some juggling.

    OK, watch carefully…

    “Hi, I would like to join the Libertarian Party, but I think we need universal healthcare…”

  5. Yes I do want to see some juggling.

    And now we’s can watch us some jugglin on the Youtoob

  6. Someone post the link the the “Juggies” from the man show! Now damn you!

  7. And Katherine fixed the typo without even acknowledging our lame jokes. Shame!

    Anyway, I wonder if this applies to prepaid. I’m almost done with my contract, and I’m moving to prepaid as soon as it’s over.

  8. From $39.99 to $50?
    The Universal Service fund is a 25% tax?
    I don’t think so. Am I missing something here?

  9. Am I missing something here?

    Just the first line of the thread.

    The Universal Service Fund is one of those annoying lines on your phone bill…

  10. Aha. It could mean the annoying line as well… I give KMW a B- for this and the typo.

  11. yet many rural areas still have notably inferior service

    No fucking shit. I can’t get a DSL line to my house, and on some days I have to stand in my front yard to get a cell signal. I don’t exactly live in the middle of nowhere, either.

  12. yet many rural areas still have notably inferior service

    I live in a rural area & have DSL through Embark (old Sprint Local)and I might as well have a string with a can on each end. Embark sucks!

  13. No worries. I understand Hillary wants to divert the USF to offset “skyrocketing” gas prices. Every driver will get a check for $8.47, payable this November.

  14. No fucking shit. I can’t get a DSL line to my house, and on some days I have to stand in my front yard to get a cell signal. I don’t exactly live in the middle of nowhere, either.

    I hear you, RC. I live in the middle of Austin, I’m talking the middle of the city and I can’t get service in my apartment. Fucking T-Mobile.

  15. “Most likely this will just mean switching to subsidizing broadband as well as telephones.”

    There, fixed that for ya.

  16. I would think that after 12 years of Universal Service and Subscriber Line Charges that were mandated in the telecom act of 96, traditional belcos have a legitimate grievance that consumers are moving away from their sevice BECAUSE of these tariffs.

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