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Geoff Daily

App-Rising.com covers the development and adoption of broadband applications, the deployment of and need for broadband networks, and the demands placed on policy to adapt to the revolutionary opportunities made possible by the Internet.

App-Rising.com is written by Geoff Daily, a DC-based technology journalist, broadband activist, marketing consultant, and Internet entrepreneur.

App-Rising.com is supported in part by AT&T;, however all views and opinions expressed herein are solely my own.

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November 3, 2008 7:12 AM

$50 Billion Spent On USF And For What?

As I build my argument for the establishment of a Rural Fiber Fund I can't help but point out the many places we're spending billions with less efficacy and clarity of vision than what I've been proposing as the solution to the rural broadband problem.

My latest target is the Universal Service Fund, or USF. You'll recognize that name from your phone bill as each month you pay a little bit into this fund that has the intent of ensuring rural areas have access to phone service. More recently there's been a push to have USF apply not just to phone service but also to broadband.

But there's a fly in this soup: by all accounts the USF is a broken system. It's not done all that well to spur the deployment of new infrastructure, and instead exists primarily today to subsidize the existing business model of network operators with no accommodations made for upgrading that infrastructure or even for getting these operators self-sufficient and not relying on USF contributions every month to stay viable.

To give you a sense for the cost of this program, check out this quote from Rep. Joe Barton (R-TX) in a letter to FCC Chairman Kevin Martin: "The program has already cost Americans $51 billion over ten years, and yet there is still no end in sight," he says. "Adding broadband will only entrap yet another service in this broken and anti-competitive subsidy program."

Hmm...so we've spent $50 billion over 10 years and don't have much of anything to show for it other than some rural areas having telephone service.

But where have we seen that number before? That's right, it's basically what I've been proposing for the Rural Fiber Fund. So think of it this way: if instead of subsidizing providers of phone service we'd focused on getting next-gen infrastructure in place we'd already have wired all of rural America with a full fiber network for the same cost.

Yet again this proves that it's not that we don't have the money to do this, it's about where our priorities are and what our vision for America's future is.

So let's change those priorities, commit ourselves to achieving the goal of a Full Fiber Nation, and establish the Rural Fiber Fund to help those areas where competition isn't working get a leg up on the global economy. It's not a matter of can we afford to do it, it's can we afford not to, can we take the chance of losing our small towns. I say no.

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Comments (1)

I don't know where you are getting your information, but asking Joe Barton about universal service is like asking the Cattlemen Association to promote a meatless burger. Have you been to rural America, particularly a school or library? Universal Service (e-rate) has connected schools and libraries in the most remote, rural areas of this country. Public fiber has been installed into communities that have little more than a school and a general store. So, to say all universal service has accomplished is telephone service shows how little you have researched the topic, or that you are simply advocating your own agenda. I will be happy to discuss this with you any time you wish.

Posted by Gary Rawson on November 4, 2008 12:32 PM

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