Guess the State and Win a Subsidy: Senate Plays Geography Games in Telecom Bill

by on September 14, 2006

Are you good at geography? If so, you may enjoy the small geography quiz buried deep inside of the telecommunications bill now pending in the U.S. Senate. Hidden on page 121 is a paragraph directing the FCC to expand universal service payments to “insular areas, including any insular area that is a State comprised entirely of islands…”

Can you name all the states that are comprised entirely of islands? No, Rhode Island isn’t one of them. As it turns out, the list of states covered by this provision is quite short:

1. Hawaii.

And, by total coincidence, a senator from that state–Daniel Inouye–is the co-chairman of the Senate Commerce Committee–which wrote the bill.

The provision stems from a decision by the FCC last year to change the way that telephone subsidies are calculated for “insular” areas such as Puerto Rico and Guam, thus increasing the amount they could get. That led, in turn, to a request by Hawaiian Telcom that Hawaii also be considered an “insular” area. The term usually includes only U.S. territories and possessions, not states, thus leaving Hawaii in the cold, so to speak. The provision in the Senate bill–proposed by Senator Inouye as a committee amendment–solves that problem, by creating a brand-new class of insular areas: states comprised entirely of islands.

The provision illustrates how far the bill has strayed from a hoped-for focus on eliminating unneeded regulation. At its core, there still is substantial positive reform: streamlining of the video franchising process. But that important change is surrounded by a luau of special interest provisions.

Commerce Committee Stevens yesterday said that due to controversies over the net neutrality issue “may well lead to [the telecom measure’s] total defeat this year after 19 months of work…” But given provisions such as the one on page 121, one has to wonder how well that 19 months was spent.

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