Thursday, September 23, 2004 - The Progress & Freedom Foundation Blog

Spreading the Wealth

The "Smith USF Reform Bill" made it out of the Senate Commerce Committee by a 13-9 vote yesterday. The bill seeks to modify the formula used by the FCC to determine "non-rural" (interpreted as "rural") cost support, which constitutes about 7% of the USF high-cost fund and is one of the more curious USF distribution mechanisms out there. Mississippi, West Virginia and Alabama currently receive over 80% of these subsidies, while Nebraska, with a third of the population density of Mississippi, receives nothing. By replacing the current methodology, which compares the average statewide cost per line to a national benchmark, with a formula based on the cost of serving wire centers, the Smith Reform bill would spread more of these subsidies to rural carriers west of the Mississippi. In short, good for the Big 12 Conference, bad for the SEC.

posted by @ 1:07 PM | General