NTCA Responds to Hazlett-Wallsten USF Paper


For Immediate Release

Contact: Laura Withers, 703-351-2086, lwithers@ntca.org
Wendy Mann, 703-351-2087, wmann@ntca.org


Arlington, Va. (July 10, 2013) – NTCA–The Rural Broadband Association today issued the following response from Senior Vice President of Policy Michael Romano regarding the paper authored by Thomas Hazlett and Scott J. Wallsten about the high-cost component of the Universal Service Fund.

“The claims made by Professor Hazlett and Mr. Wallsten about the high-cost component of the federal Universal Service Fund rely upon tired, old canards about the program and paint a distorted picture of the rural telecommunications marketplace. The authors’ assertions that the premises of the high-cost and schools and libraries programs have ‘vanished,’ and that these programs have ‘run out of things’ to support, prove only that the authors’ analysis has been configured to justify their desired results.

With respect to the specific operations and effectiveness of the high-cost program, the authors miss the mark in too many respects to count. For example, the authors ignore the fact that small rural carriers have leveraged universal service support to deploy networks that enable not only affordable telephone services, but also at least basic levels of DSL-speed broadband for more than 92% of customers in sparsely populated rural areas. The authors also somehow breeze past (even as a chart in their report confirms) the fact that the high-cost portion of the Universal Service Fund has not grown for years, even as broadband penetration in rural areas has increased and rates have remained affordable. And, as a primary linchpin of their work, the authors highlight data from eight years ago from a handful of very small companies that, by virtue of their size, have higher per-line support amounts—even as the total support that these selected companies receive equals less than 1% of the total high-cost universal service budget and less than 0.5% of the total universal service budget.

Hundreds of small, community-based carriers operate every day in the most challenging business and terrain environments in the United States. The federal universal service program has been and remains essential in the deployment of networks and the availability of affordable, reasonably comparable services in such areas. A thoughtful, data-driven debate about repositioning all aspects of the Universal Service Fund—high-cost, low-income, schools and libraries, and rural health care—for a broadband-capable, IP-enabled world is important, but this paper unfortunately does little, if anything, to advance that kind of informed discussion.”  


NTCA–The Rural Broadband Association is the premier association representing nearly 900 independent, community-based telecommunications companies that are leading innovation in rural and small-town America. NTCA advocates on behalf of its members in the legislative and regulatory arenas, and it provides training and development; publications and industry events; and an array of employee benefit programs. In an era of exploding technology, deregulation and marketplace competition, NTCA’s members are leading the IP evolution for rural consumers, delivering technologies that make rural communities vibrant places in which to live and do business. Because of their efforts, rural America is fertile ground for innovation in economic development and commerce, education, health care, government services, security and smart energy use. Visit us at www.ntca.org.