Best Broadband

The FCC has begun their sales pitch for the nation's first national broadband plan ahead of its formal unveiling next week. As we've been discussing, we haven't been too impressed by the plan's failure to tackle competition, or its tendency to make proclamations that sound good but are rather empty upon closer inspection. The FCC is back today making headlines about how the agency hopes to help the estimated 100 million Americans without broadband by offering "free or low cost wireless plans" according to Reuters:

Looking at the actual FCC statement (pdf) however, there's no real explanation of how exactly the agency hopes to do this. The statement also suggests that the FCC will "consider" such a plan, not neccessarily that they'll implement it. With spectrum obviously a limited resource, clearly the FCC's thinking about some kind of subsidy package to the nation's telcos if they provide cheaper service. Of course the FCC already plans to subsidize carriers as they examine "reforming" the long broken USF system.

That reform, according to several people familiar with the plan, could involve a new monthly fee on broadband connections used to expand the plan to cover residential broadband (right now it covers only rural phone service, and broadband provided to schools). We're told the fee is slated to be somewhere around $1 a month per person, but could be higher when the final plan is unveiled. However, "free or low cast wireless service" seems like a long shot.

Reforming the USF is a very complex and difficult task in and of itself, given the fund (and the e-Rate program) has a bit of a history as a poorly supervised mess, according to GAO studies. $25 billion has been dumped into e-Rate alone since 1998, though the FCC for many years didn't track where it went. That means that maybe that money helped, or maybe it didn't. Maybe it just found its way into the pocket of a phone company, or maybe it helped buy a high school PC in Pensacola, Florida.

One thing we know is that AT&T and Verizon have been lobbying Uncle Sam very hard for several years to ensure they get a bigger chunk of the USF pie. From the looks of things they're going to get it to the tune of several billion per major incumbent annually, according to one plan source. Getting more money for incumbents will be the primary goal. Maybe consumers will see that money put to use in tangible ways like "free or cheap" wireless service -- but maybe they won't.
read comment(s)