Genachowski Urges Thrifty USF Overhaul
The Universal Service Fund must be revamped to maximize the deployment of broadband and minimize the financial burden on consumers, FCC Chairman Julius Genachowski said Wednesday. “When up to 24 million Americans don’t have access to a communications technology that is essential to participation in our 21st Century economy and democracy, I think that is unacceptable.” Speaking in Seattle to a conference of the Organization for the Promotion and Advancement of Small Telecommunications Companies, Genachowski laid out five USF reform principles.
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Genachowski sought fiscal restraint in the proposed overhaul. “USF and intercarrier comp are on an unsustainable path,” he said. “As the math of the overall Universal Service Fund gets worse every year, the importance of rural broadband to rural America gets greater.” Future USF allocations must “deliver the most bang for the buck and must not unfairly burden consumers,” he said.
The FCC’s decision to change the definition of broadband to at least 4 Mbps is a good example of frugal policymaking, said Genachowski. Though some argue that the commission should require 100 Mbps, he said that would cost consumers an additional $320 billion. “It would create a fiscal burden that would run counter to the purpose of the USF,” said Genachowski. That would drive people off the network, “including, disproportionately, the neediest Americans in both rural and urban America,” he said.
Supporting multiple competitors strains USF, said Genachowski. “We're seeing the development of a rural-rural divide, in part due to USF’s uneven distribution of subsidies to different carriers serving rural America. Meanwhile the burden on USF and the consumers who ultimately pay into the fund continues to rise.” Any new rules should be phased in slowly, so service providers and investors have time to adjust to a new framework, Genachowski said. The overhaul must be “transparent, fact-based and numbers-driven,” he said.
"There are many hard issues we will have to work through to modernize USF,” Genachowski said. “But let’s not kick the ball down the road.” He emphasized the tremendous benefits, including savings, that the universal deployment of broadband would have on healthcare, education and small-business growth. “A vibrant U.S. economy requires a vibrant rural economy,” Genachowski said. “If we want the U.S. to be the world-leading market for the innovative leading products and services that drive economic growth worldwide, we need rural Americans to be full participants in our economy.”