Rural Broadband Gets Boost From Phone-Fund Proposal

[David Farber <dave () farber net>]

________________________________________
From: Bob Frankston [Bob19-0501 () bobf frankston com]
Sent: Monday, November 26, 2007 3:59 PM
To: David Farber
Cc: johnl () iecc com
Subject: Rural Broadband Gets Boost From Phone-Fund Proposal

Slowly we seem to be moving towards allowing some of the problematic Universal Service Fund to be used for 
connectivity. While I have reservations about “broadband” it’s still a major step not-backward to use it for more than 
more of that Olde Tyme Telephony. Perhaps some local phone companies will be able to be proactive and do more than just 
DSL but move towards providing a connected infrastructure using the existing copper as an economical first step. Or is 
that expecting too much?

I apologize for the wording – but I’ve already written about why the USF is a problem and why we need to do more than 
just broadband. The premise of the premise of USF is homeopathic – if it looks like telephony it must be used to cure 
telephony. I’ve also compared it to taxing yellow paint to subsidize corn farmers. Connectivity is a first order “good” 
and should be funded transparently as basic simple infrastructure. Still, I do appreciate the incremental improvement 
over limiting the use of the fund to pay for telephony. The premise that telephony is expensive and that taxing it 
won’t make it that much more expensive. The problem is that telephony is now nothing more than an application which has 
essentially no cost above the basic connectivity. Thus the USF is a $7,000,000,000 hole in the economy that is used to 
prevent the use of telephony facilities for connectivity. Simply removing that restriction would represent a great step 
forward.

Rural Broadband Gets Boost From Phone-Fund Proposal
By COREY BOLES (Wall Street Journal)
November 24, 2007; Page A4
WASHINGTON -- To accelerate development of broadband Internet services in rural and poor areas, policy makers who 
oversee the $7 billion fund that subsidizes telephone service recommended using the pool to help build broadband 
networks in those expensive-to-reach areas of the country
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