The Federal Communications Commission (FCC) is reforming the Universal Service Fund (USF) fund as a major part of the National Broadband Plan. Broadband is driving rapid changes in the USF’s High Cost fund, which supports traditional telecommunications services. Commercial providers should understand this topic to help them weigh the pros and cons of each approach and evolve existing business strategies as necessary. State regulators should research this issue in order to ensure that they understand the potential costs and benefits of a High Cost subsidy support mechanism versus a reverse auction USF support methodology.
In this article, Michael Spead, a Universal Service Administrative Company (USAC) Senior Manager of the High Cost Fund and currently ICF’s Senior Technical Specialist on USF issues, highlights how a reverse auction structure, proposed by both the FCC and the large carriers, could provide the benefit of allowing commercial providers to focus on their core competency, deploying cost-efficient broadband networks in a technology neutral fashion.
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