Re: Finland makes broadband access a legal right

[Sean Donelan <sean () donelan com>]

On Thu, 1 Jul 2010, William Herrin wrote:
> On Thu, Jul 1, 2010 at 8:04 AM, Gadi Evron <ge () linuxbox org> wrote:
> > http://edition.cnn.com/2010/TECH/web/07/01/finland.broadband/index.html?hpt=T2
>
> In the US, the Communications Act of 1934 brought about the creation
> of the "Universal Service Fund." The idea, more or less, was that

The Universal Service Fund was created as a result of the Bell divesture 
in 1984; and extended by the Telecommunications Act of 1996.  It didn't 
exist before then.  There was the Kingsbury Agreement in 1913 (One 
System, One Policy, Universal Service), but universal service didn't mean 
the same thing.  Universal service meant if you had a phone, it could call 
any other phone; but there wasn't a goal of a phone in every house until
the 1960s.

> every phone line customer contributed to the fund (you'll find it
> itemized on your phone bill) and the phone companies had to charge the
> same for every phone line regardless of where delivered in their
> territory but when initially installing an unusually difficult
> (expensive) phone line the phone company was entitled to reimburse its
> cost from the fund.

As part of the natural monopoly, there was a system of rate averaging and 
settlements.  But there was often radically different prices based on 
public policy goals, for example business phone users paid more and 
residential phone users paid less.  Long distance prices were kept high 
in order to keep monthly residential bills low.  Its very difficult to 
maintain public policy price differentials in a competitive environment; 
but it was also difficult to maintain those prices even in a monopoly 
environment.

The early ARPANET/Internet indirectly benefited from some of those public
policy pricing decisions in the US.

> In 1996 a certain inventor of the Internet decided that the universal
> service fund needed to pay for PCs in rural schools (the "E-Rate"
> program) instead of improving rural communications...

The 1996 Universal Service Fund also expanded who paid into the fund.  If 
the Universal Service Fund is expanded again to pay for "broadband," the 
biggest question is how will the "contribution base" be expanded to pay
for it?