The State Of The Union And The Politics Of USF

Although Washington, D.C. was closed down this past week with over 40 inches of snow and Congress is in recess for the coming week, the inactivity here is in sharp contrast to what will be in the coming months after the FCC release of the Broadband Plan next month. In the latestBack Page, Tom Smith, our Congressional advisor and editor of the Independent Report, offers his thoughts on the changing political landscape and the November elections and the inevitable tie to change in USF. While public interest groups and large telecom companies position for the debate ahead, the Back Page raises both a question and a call for the rural independent industry to commit the resources needed to mount the grass roots response.

The politics of change in USF will undoubtedly be shaped not only by the FCC Broadband Policy when it is announced, but also by the results of the Broadband Stimulus program. Critics are unfairly swiping out at both RUS administrator Jonathan Adelstein and NTIA Administrator Larry Strickling, both of whom inherited the framework of a flawed program that Congress rushed into existence as part of last year's Recovery Act. Last week, the interest in the Broadband Stimulus program reached the popular press with an article in USA Today. (Stimulus funds for high-speed Internet access tangled up - USATODAY.com)

Unfortunately, the inevitable criticisms of waste in the Broadband Stimulus program will grow - I am hearing from a growing number of companies about how many of the broadband stimulus grants are directed to areas that are already well covered with high speed internet availability. And, it is likely that the criticism of waste will be piled on to the attacks by the adversaries of USF in the coming months.

The irony, of course, is that the real operational results of the expenditure of USF in rural incumbent areas, and the resulting build-out of rural networks that support high-speed broadband access, demonstrate that the USF program for rural incumbent local exchange carriers has not only been far from wasteful, but it has been one of the most successful regulatory programs. What's missing? As this week's attached Back Page suggests, all that is missing is an effective effort to tell the story - more to come and more specifics in coming Back Pages leading up to the FCC's Broadband Policy presentation. (To view the most recent Back Page, click here.)