Monday, June 20, 2005

DTV and Universal Service

Senator McCain's DTV bill and today's Tech Daily (subscription required) article on the House DTV bill by Messrs. Upton and Barton both underscore the core sticking point of accomplishing the transition: the size and extent of the subsidy for DTV tuners. The question is familiar to communications policy: the size and nature of the universal service subsidy.

Continue reading DTV and Universal Service . . .

posted by Ray Gifford @ 8:37 PM | Capitol Hill, Spectrum, Universal Service

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Wednesday, June 15, 2005

Postrel at Zion

Virginia Postrel is blogging from a ranch near Zion National Park where she is enamored with the buffalo. She notes "There's no cell phone service, and very limited regular phone service at the resort. But they've got free wi-fi."

Granted, this is a resort. She is on vacation. Virginia is very technologically savvy. And, despite what she writes, the access is far from "free." Given these caveats, what does her comment tell us about the staying power of today's universal service policies? In other contexts, Zion was a citadel; it remains a term that refers to a heavenly or utopian place. Today's system can hardly be mentioned in the same paragraph as the term utopian. At the least, universal service policy must orient toward more alternative technologies, especially for the vast expanses of the American West, and get off of it's wireline focus. How can we do that? When we subsidize, target subsidies toward consumers not firms or technologies. People in places like Zion are well equipped to decide which technology - in some contexts, wireline out where the buffalo roam might be the answer - is best suited to the situation. Want to know more about the status of universal service and why reform is necessary? Look here.

posted by Kent Lassman @ 11:27 AM | Universal Service

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Thursday, June 9, 2005

Video Over Fiber: Rhetorical Ironies and Inconsistencies

In the rhetoric of communications policy debates, the irony of telcos being criticized for (potentially) bringing another video service option to consumers goes without saying. The promise of fiber-based video offerings has generated a backlash of pleas that such offerings be subjected -- before they are barely launched -- to various fees, network build-out requirements and other so-called "social" obligations. As stated elsewhere, these pleas arise from several potential motives, only some of which may be self-interested. An equally-important point, however, may be that these pleas illustrate inconsistencies -- which are ultimately unsustainable -- in the rhetoric and related policy judgments associated with previously distinct services that are converging over IP networks.

Continue reading Video Over Fiber: Rhetorical Ironies and Inconsistencies . . .

posted by Kyle Dixon @ 8:28 PM | Broadband, Cable, Communications, Innovation, Internet, Universal Service

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Thursday, May 26, 2005

The Ho-Hum on Communications Taxes

Somewhere buried in today's TR Daily [subscription required] and entirely absent from many other publications is the following conclusion from a recent study of communications taxation: State and local governments tax telecom services at a rate more than twice the rate of other industries.

That this finding merits so little prominence is itself unremarkable given the heavy emphasis on issues that should evolve significantly in the foreseeable future (e.g., mergers, digital TV, indecency, 911 requirements). More remarkable is the sad truth that heightened tax burdens on communications services are commonplace and unlikely to change significantly anytime soon.

Continue reading The Ho-Hum on Communications Taxes . . .

posted by Kyle Dixon @ 3:31 PM | Capitol Hill, Communications, General, State Policy, Universal Service

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Tuesday, May 10, 2005

Center for the New West Conference on Universal Service

Prof. Phil Weiser moderated the panels at this recent event and has posted a summary of the conference here.

posted by Adam Peters @ 3:31 PM | Universal Service

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Wednesday, April 13, 2005

Reasons to Be Pessimistic about Universal Service Reform

If they can't do it here, what can be accomplished here?

posted by Ray Gifford @ 12:21 PM | Universal Service

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Friday, April 8, 2005

E-Rate Fraud? I am shocked, shocked...

The Wall Street Journal reports that six companies and five individuals has been indicted for fraud related to the e-rate "schools and libraries fund." That a $2.25 billion dollar a year pile of money is a temptation to charlatans, fraud artists and wanna-be tech welfare recipients is startling to me. Since the amount of money generated by the fund long-ago could have paid for its ostensible ends--to wire schools, libraries and rural health care facilities--it is not wonder that it is now just an IT gravy train. Welcome to the REA of the 21st Century -- a good idea when it started, but once it accomplished its end it should have just faded away.

posted by Ray Gifford @ 10:58 AM | Universal Service

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Thursday, March 31, 2005

Taxation by Regulation: No Escape

Nebraska and Arkansas this week follow "taxation by regulation" to its logical ends by affirming the respective states' rights to tax Voice over Internet Protocol (VoIP). The Nebraska PSC, with a display of not inconsiderable regulatory will, concludes that is possesses the authority to tax VoIP for purposes of its state universal service fund. Meanwhile, the March 29 Communications Daily (subscription required) reports that the Arkansas legislature moved to "to ensure that VoIP and other types of non-traditional telecom services are subject to Ark.'s telecom gross receipts tax."

The Nebraska PSC action is the more interesting of the two, but both are of a piece. Both actions demonstrate the internal logic of the current universal service system that cannot abide any exit from the taxble "telecommunications" category. Thus, the Nebraska PSC endeavors -- in the face of the FCC's Vonage Order -- to conclude that VoIP services can be taxed for state universal service purposes. Surprise, surprise, the PSC concludes it gets to tax VoIP as telecommunications, based in part on the FCC's ducking of the matter in the Vonage Order. Universal service policy abhors a regulatory definitional vacuum -- and the states will fill in where the FCC gives room.

Continue reading Taxation by Regulation: No Escape . . .

posted by Ray Gifford @ 11:12 PM | Universal Service, VoIP

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Friday, March 25, 2005

Social Security, Moral Right and Experimental Economics

Robert Samuelson has a typically insightful column on the language of social security. Samuelson notes that by not calling social security and medicare what they are, welfare programs that are transfers from the employed to the retired, we cannot proceed to discuss reforming them honestly. In part, this is because the recipients believe they have a moral right to the transfer payments premised on earlier payment of taxes, notwithstanding that those taxes do not even begin to cover the net benefits being received.
His conclusions are backed by experimental economists

Continue reading Social Security, Moral Right and Experimental Economics . . .

posted by Ray Gifford @ 12:17 PM | Economics, Universal Service

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Wednesday, December 8, 2004

More Pressure on Universal Service

Nope, it's not from VoIP or wireless or email, but it's a similar theme. This from the U.S. Postal Service's CFO yesterday:

For the first time in history, in 2005 First-Class Mail is projected to fall below Standard Mail as the largest volume product. This shift in mail mix to lower revenue-per-piece mail classes will result in shrinking margins which are used to maintain universal service.

posted by Adam Peters @ 3:24 PM | Universal Service

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Thursday, December 2, 2004

Universal common denominators in telecom reform

Today's reports in both TR Daily [subscription required] and Comm Daily [Lexis subscription required] highlight common denominators in anticipated Congressional debates over telecom reform: "universal service" and related issues regarding how telecom carriers compensate each other when they exchange voice and data traffic over their networks. Although staff from both sides of the aisle differed on how extensive telecom reform should be, all essentially agreed that these "real money" issues must be addressed. A universal service study to be previewed tomorrow (but released subsequently) may provide much-needed evidence on these issues. The study, authored by PFF's own Randy May with Joseph Kraemer and Richard Levine, will provide useful data on how various populations, including low income and rural customers, use communications services. The study should shed light on what, at base, these constituencies may need to satisfy the universal service goal of preventing Americans from falling off the network. In so doing, the study also may signal whether telecom reform workably can be limited to minor tweaks of the existing Communications Act, or whether Congress must draft a new Act "from the ground up" to relieve the strain on compensation mechanisms and other regulations caused by technological developments like Internet voice service.

posted by Kyle Dixon @ 2:57 PM | Communications, Universal Service

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Monday, November 15, 2004

Universal Service on the Hill

Congress returns tomorrow to do the one annual task required of it in the U.S. Constitution -- fund the federal government for another year. But Communications Daily (subscription required) is reporting today that Senate Appropriations Committee Chairman Ted Stevens (R-Alaska) may use this week to push through legislation addressing a recent FCC decision that changes the way in which Universal Service Fund fees are accounted. USTA, NCTA and others fear contribution costs will rise under the FCC's new rules.

Regardless of the merit of Stevens' proposed legislation (and not addressing the distaste one is left with at the idea of slipping it through in a lame-duck Congress), the controversy highlights the larger problem facing the USF -- namely its relevance in a completely transformed communications landscape. Ray recently argued that if USF is to be preserved in a digital world, it must be converted into "a transparent, non-bypassable tax where the net contributors will be able to trace their compelled largesse to the net beneficiaries."

posted by Patrick Ross @ 10:42 AM | Universal Service

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Monday, November 1, 2004

Here We Go.....

Telephony Online is reporting that USAC will request an increase to the USF contribution mechanism tomorrow because of a shortfall in the e-rate program. The current rate on interstate revenues is 8.9%, and it is expected that the requested increase will be 12.5% due to lower long-distance revenues and higher USF demands.

posted by Adam Peters @ 11:09 PM | Universal Service

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