Universal Service Fund Still Poorly Managed Money PitFCC still not really tracking where money goes.... 08:53AM Monday Jul 14 2008 by Karl Bodetags: fcc · business · telcoRemember how for years I've noted that the Universal Service Fund, a system you pay into monthly via your broadband and phone bills, was poorly regulated by the FCC -- to the point they never bothered to track where most of the money went? Well, other than VoIP customers now paying USF fees, nothing's changed. Despite the FCC claiming they'd look into it back in 2005, a new report (pdf) by the GAO (via Ars Technica) notes that the system is still a money pit: But perhaps the most important conclusion of the GAO report is that nobody really audits the cost records of these telcos for, well, the truth. FCC and USF data collection efforts only audit a small percentage of telcos, and "generally focus on completeness and consistency of carriers' data submissions, but not the accuracy of the data." In many instances the cost and line count data isn't verified. "Inaccuracies in cost and line count data, which are not uncovered through review, could facilitate excessive program expenditures," GAO concludes. So not only does the FCC not provide fund recipients with expected deployment goals, in most cases they don't even bother to independently check where the millions go. Yeah, what could go wrong?
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pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD |  Ban It
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TK Junk Mail
Go ahead, make my day
Premium
join:2002-03-03
Margate City, NJ
clubs:
 ·Comcast
edit:
July 14th, @01:10PM
| Re: Ban It said by pnh102  :Get rid of the USF. I agree. It is welfare for rural users; rural politicians & school districts; and for telcos(mostly small rural telcos). Let them pay the full freight of getting service. | |
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zachary1
you talkin' to me?
join:2004-03-07
right here | Re: Ban It You got somethin' against rural people? And people on welfare? | |
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KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK | *Agreed*. The USF is a massively wasteful Telco slush fun.
Kill it. | |
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i5050MbSoon
Formerly TwoKDialup
Premium
join:2002-06-07
Coloma, MI
| Go figure! Exactly! The telcos get bazillions in USF corporate welfare yet I still can't get telco DSL in my area (not that I'd want it).
In contrast, Comcast gets zero USF dollars yet they have offered HSI in my area for years. FWIW, my current average speeds are running around 24,000 down and 2500 up.
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Comcast has spoiled me rotten! | |
| | EPS
join:2008-02-13
Hingham, MA | Re: Go figure! I was under the impression that USF was only supposed to be used for telephone service- i.e., using it to provide DSL would technically be a misuse. | |
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i5050MbSoon
Formerly TwoKDialup
Premium
join:2002-06-07
Coloma, MI
| Re: Go figure! said by EPS :I was under the impression that USF was only supposed to be used for telephone service- i.e., using it to provide DSL would technically be a misuse. From: »www.fcc.gov/wcb/tapd/universal_service/
The goals of Universal Service, as mandated by the 1996 Act, are to promote the availability of quality services at just, reasonable, and affordable rates; increase access to advanced telecommunications services throughout the Nation; advance the availability of such services to all consumers, including those in low income, rural, insular, and high cost areas at rates that are reasonably comparable to those charged in urban areas.
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Comcast has spoiled me rotten! | |
| | | | patcat88
join:2002-04-05
Jamaica, NY
| Re: Go figure! said by i5050MbSoon :said by EPS :I was under the impression that USF was only supposed to be used for telephone service- i.e., using it to provide DSL would technically be a misuse. From: » www.fcc.gov/wcb/tapd/universal_service/The goals of Universal Service, as mandated by the 1996 Act, are to promote the availability of quality services at just, reasonable, and affordable rates; increase access to advanced telecommunications services throughout the Nation; advance the availability of such services to all consumers, including those in low income, rural, insular, and high cost areas at rates that are reasonably comparable to those charged in urban areas. Totally wrong, your talking about "Universal Service" which is that little zip code game the FCC plays. Thats just a congressional mission, its not law.
Here is all that the Universal Service Fund will pay for »edocket.access.gpo.gov/cfr_2004/···.101.htm | |
| | | decifal
join:2007-03-10
Bon Aqua, TN
| said by EPS :I was under the impression that USF was only supposed to be used for telephone service- i.e., using it to provide DSL would technically be a misuse. Well, it needs to be changed and DSL "Not" Uverse needs to be mandatory for a teleco to build out. Uverse should come in second priority from our monopotelico company's. Satellite TV imo works damn good for spreading out cable tv broadcasting, but not nowhere near good enough for internet demands and use's.. DSL should be available anywhere a phone line is provided.. Complain all you want, this is my belief for this current day and time's needs.. They all recieve too much in government benefits to not have already built out their networks to everyone..
Teleco employee's, your going to argue, but i'm sorry your underpaid and probably overworked for your services. But the upper foodchain is robbing us all.. | |
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i5050MbSoon
Formerly TwoKDialup
Premium
join:2002-06-07
Coloma, MI
| But wait, there's more!»www.capthefund.org/learnabout.cfm
One of the five biggest private-equity buyout firms in America. Some of the richest men in the U.S. financial world will become recipients of the USF tax subsidy as a result of the planned private-equity buyout of Alltel, which is being acquired by Texas Pacific Group (TPG). They will pocket the projected annual USF subsidy paid to Alltel of up to $144 million-$280 million (based on 2007 levels reported in SEC filings). In 2006, TPG was involved in $101 billion worth of deals. TPG's latest buyout fund is worth $15 billion. TPG has bought out such well-known companies as the J. Crew Group, Neiman Marcus, Burger King, MGM, and Harrah's Entertainment, the world's largest gaming company.
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Comcast has spoiled me rotten! | |
| | wierdo
join:2001-02-16
Tulsa, OK
 ·Future Nine Corpor..
·Teliax VOIP
·Cox HSI
| Re: But wait, there's more! said by i5050MbSoon :» www.capthefund.org/learnabout.cfmOne of the five biggest private-equity buyout firms in America. Some of the richest men in the U.S. financial world will become recipients of the USF tax subsidy as a result of the planned private-equity buyout of Alltel, which is being acquired by Texas Pacific Group (TPG). They will pocket the projected annual USF subsidy paid to Alltel of up to $144 million-$280 million (based on 2007 levels reported in SEC filings). In 2006, TPG was involved in $101 billion worth of deals. TPG's latest buyout fund is worth $15 billion. TPG has bought out such well-known companies as the J. Crew Group, Neiman Marcus, Burger King, MGM, and Harrah's Entertainment, the world's largest gaming company. Um. Do you not remember that Alltel spun off their landline business a couple of years ago?
Thanks for playing. Please try again.
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It's wierdo, not weirdo. Yes, I know that's not the 'proper' spelling of the similar english language word.  | |
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cdru
Go Colts
Premium,MVM
join:2003-05-14
Fort Wayne, IN | For a company that moved $101b in deals in 2006, $144m is 1/10 of 1%, or in other words, pocket change. | |
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tschmidt
Premium,MVM
join:2000-11-12
Milford, NH
 ·Verizon Online DSL
| Fix it or scrap it USF has been an embarrassment for years. But I though it was limited to how money was spent not how it was collected.
The USF has four components: High Cost areas, Low Income customers, Rural Health Care, and Schools & Libraries (e-Rate).
»en.wikipedia.org/wiki/Universal_Service_Fund
The second two Rural Health Care e-rate are focused on Internet access. Seems unfair to impose a surcharge on telecommunication providers to subsidize Internet access.
Communities would get more bang for the buck by raising the money locally through direct taxation. That way local taxpayers have a direct say in what services are provided and what they are willing to pay for. Instead we have a system where Federal government extracts it, siphon some off in Washington, adds lots of conditions to get it back and then returns a fraction to the community. Worse it creates a use it or lose it mentality. Money is being collected regardless of whether or not local community gets any of it back. This creates a feeding frenzy seeing who can write the best grant proposal.
To address high cost areas would be a simple matter to require telephone providers charge the same rate regardless of where customer resides within a given state, since tariffs are filed by state. I actually though they did that already but am not sure.
One wonders what the administrative cost is for the low income program vs the benefit received. Here in NH monthly cost including taxes for a single residential phone is only $30.
All in all the USF has been an embarrassment.
/tom
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| | wierdo
join:2001-02-16
Tulsa, OK
·Future Nine Corpor..
·Teliax VOIP
·Cox HSI
| Re: Fix it or scrap it said by tschmidt :To address high cost areas would be a simple matter to require telephone providers charge the same rate regardless of where customer resides within a given state, since tariffs are filed by state. I actually though they did that already but am not sure. Ah yes, that'll work. Leave the monopolizing bastards (at&t and VZW) who operate mainly in the larger cities and towns the cheap lines, while leaving the rural areas with vastly greater loop length and much greater wire miles per subscriber to the rural telcos.
Then lets force them all to charge the same rates. Are you an idiot?
FWIW, from my perspective, USF works great. None of the rural telcos I'm familiar with are getting rich off of it. With LD settlements next to nothing now for most telcos, USF is the only thing standing between subscribers and $40 a month or more basic rate phone bills.
The telcos I'm familiar with aren't making a whole lot of money, are pretty well community oriented, doing their absolute best to eke out a living while still keeping the service affordable. They offer DSL. One of them offers ISDN for no more than regular phone service and has for years. Why? Because they're honest about the cost. It costs them about the same to provide a single talk path on ISDN than it does with POTS, so they charge about the same. (The capital cost in the form of the switch is a hair higher, while there is less copper to maintain per talk path and only sealing current, so no battery)
The companies that aren't, in the main, getting USF are the ones who charge sky-high prices on low costs and are very profitable for it. Of course, even the big guys get USF payments for their rural access lines, and they deserve it the same as the solely rural telcos.
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It's wierdo, not weirdo. Yes, I know that's not the 'proper' spelling of the similar english language word. | |
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n2jtx
join:2001-01-13
Glen Head, NY
·Optimum Online
| Universal Service Fund? I thought it was called the Universal Slush Fund. Free money for the taking with minimal oversight. Plus the various telecom companies that have to pay in (well we users do) BUT only a few actually get the benefit. Cellular pays but landline gets the funds.
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I support the right to keep and arm bears. | |
| | | decifal
join:2007-03-10
Bon Aqua, TN
| Re: Universal Service not so Universal said by Mr Matt : If the customer premises is more than 50 feet from the right of way, the customer must pay a per foot rate for additional wire and for any additional telephone poles required to complete the installation. Universal Service is really smoke and mirrors. Unless a customer is constructing a home within 50 feet of a public road Universal Service is Bologna. The telephone companies in the State of Florida have been trying to have the law changed to allow them to cherry pick where they provide telephone service. Thats interesting.. Especially sense here in Dickson Tn, you have to build at least 75 feet from the center of the road.. If your steps coming outta your door exceed this, they give you hell about it... | |
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jinjimbob
Troy Mcclure
join:2001-11-13
Enumclaw, WA | It is for servicing the line after it is installed too. | |
| CCafe
join:2000-08-16
Des Moines, IA
·Qwest.net
edit:
July 14th, @01:19PM
| Did anybody even read the GAO pdf? The last 7 pages point out a lot of inaccuracies of the GAO report. Not to mention a few of things the GAO said needed to be done had already been established almost a year ago.
I think whomever wrote this article skimmed the first few pages and then wrote this article condemning the FCC.
I admit the FCC and the USAC have made a lot of blunders in the past. But after reading the entire GAO report including the last 7 pages, I think that they have really been working hard on correcting past mistakes.
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Fear is the mind killer! | |
| hottboiinnc
Kyle
join:2003-10-15
Toledo, OH
·buckeye cable
| Broadband? What HSI provider charges the USF besides DSL Extreme? Nobody else charges it. So how does everyone pay it on that?
ATT admits they do not charge it. Sonic does not charge it. Local ISPs here do not charge it. VZ does not charge it. DSL Extreme charges it. They claim its a Tax passed on to them via AT&T which ATT says nicely they're full of shit. | |
| dynodb
Premium,VIP
join:2004-04-21
Minneapolis, MN
| Nothing new The USF has been mismanaged for a lot more than a few years, with the money often distrubuted based on politics rather than needs.
The irony? Many people still want even more government involvement in the industry, even to the point of providing service. No matter how many examples of failure by the federal government, some people insist that the solution is yet more federal government action- something I'll never understand. | |
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My Own Telco
Universal Service not so Universal
The Universal Service Fund was suppose to compensate telephone companies for providing service in areas that would not be profitable. When many customers try to order telephone service they would be advised that Universal Service did not cover the cost for running lines on private property. That means if the customer lived on a private road, unless the developer paid for running lines from the nearest public right of way, to the customer premises the customer had to pay the cost of installation of the service drop. The same issue would come up if a customer had a long driveway. The installation cost for telephone service on most tariffs allow the customer a fifty foot drop and one telephone pole to complete the installation. If the customer premises is more than 50 feet from the right of way, the customer must pay a per foot rate for additional wire and for any additional telephone poles required to complete the installation. Universal Service is really smoke and mirrors. Unless a customer is constructing a home within 50 feet of a public road Universal Service is Bologna. The telephone companies in the State of Florida have been trying to have the law changed to allow them to cherry pick where they provide telephone service.