Martin Likes ‘Reverse Auction’ Idea for Universal Service
The rising cost of universal service subsidies might be stemmed through a new system based on “reverse auctions,” FCC Chmn. Martin said in a Q&A session at a Bank of America conference Wed. in N.Y.C. Martin said the idea, which has been proposed in the past, would let phone companies bid to provide universal service in rural areas, with the winners offering the lowest per-subscriber subsidies. For example, a bidder might say service could be guaranteed at $100 a subscriber, he said. “They'd be bidding on how little subsidy you need,” he said. What’s nice, he said, is that such a system would be technologically neutral.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
Martin said he’s becoming concerned about the cost of the USF program and the growth of multiple providers seeking subsidies to provide service in the same areas. It’s one thing to decide there should be a subsidy to bring affordable phone service to rural areas, but it’s another to decide “as many companies as there are in Manhattan” should be subsidized for that rural area, Martin said. “That leads to a form of managed competition,” he told the audience. He said he also was troubled that as a result of multiple universal service subsidies, “we pay for people to get cell phones even if they keep their wireline phone.” If there was a “limitless amount of money,” subsidies for multiple providers might not be such a problem, he said. But the bottom line is that the average phone user is seeing higher USF assessments on their bills, Martin said.
In answer to a question, Martin repeated his view that the FCC doesn’t need to develop rules for network neutrality because “we haven’t seen a widespread problem we need to address by adopting rules at this point.”