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The FCC’s universal service tax is officially out of control. The agency announced yesterday that the “universal service contribution factor” for the 1st quarter of 2012 will go up to 17.9%.  This “contribution factor” is a tax imposed on telecom companies that is adjusted on a quarterly basis to accommodate universal service programs. The FCC [...]

Freelance journalist Laurence Cruz was kind enough to call me recently looking for comment on whether broadband should be considered a human right. Well, actually, he probably didn’t have many options. If you do a quick search on the topic, you’ll find an endless stream of essays in favor of the proposition.  Then, somewhere in [...]

Federal Communications Chairman Genachowski previewed the universal service reform plan the commissioners are discussing in a speech today. The speech offers a masterful summary of the myriad inefficiencies created by the current universal service subsidies and intercarrier compensation payments. Most of the examples highlight plain old-fashioned waste. The universal service program collects billions of dollars from telephone subscribers, then [...]

A couple days before Congress announced a debt deal, half a dozen telecommunications companies filed a plan on July 29 with the Federal Communications Commission that attempts to resolve a much longer-running set of negotiations over big bucks.  The “America’s Broadband Connectivity” Plan seeks to replace Universal Service Fund subsidies for telephone service in rural [...]

While most folks have been obsessing over their income taxes the past few weeks, Jerry Brito and I have been obsessing about a non-tax: the universal service assessments on our phone bills. More specifically, the Federal Communications Commission has asked for comments on its plan to gradually turn the current phone subsidy program in high-cost [...]

In previous posts, I’ve criticized the Federal Communications Commission for arbitrarily jacking up the speed in its definition of broadband (to 4 mbps download/1mbps upload) so that third generation wireless does not count as broadband. This makes broadband markets appear less competitive.  It also expands the “need” for universal service subsidies for broadband, since places that [...]

The folks at the Pew Research Center’s Internet & American Life Project came out with another installment of their “Home Broadband” survey yesterday. This one, Home Broadband 2010, finds that “adoption of broadband Internet access slowed dramatically over the last year.” “Most demographic groups experienced flat-to-modest broadband adoption growth over the last year,” it reports, [...]

The majority on the FCC seems hell-bent on establishing rural broadband subsidies as a perpetual entitlement program that will never “solve” the rural availability problem because the goalposts will keep moving.

It’s far from obvious how the FCC could legally subsidize broadband with a download speed of 4 mbps.

There’s no sense in funding broadband subsidies with a mechanism that discourages people from subscribing to broadband.