Reverse Auctions Get Tepid Support from Universal Service Panel
Reverse auctions might rein in burgeoning universal service costs, but there are pitfalls, panelists warned Thurs. in a program sponsored by the D.C. Bar. It’s an “interesting idea” but shouldn’t be the sole solution, said Eric Einhorn, AT&T exec. dir.-federal regulatory. Done right, it could be a “market-oriented” way to downsize the Universal Service Fund (USF) but “the devil is always in the details,” said CTIA Asst. Vp Paul Garnett. It would have to be implemented in a technologically- and competitively- neutral manner, he said.
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Administration could be hard, Lisa Zaina, exec. dir. of the Independent Telephone & Telecom Alliance, said: “The administration of a reverse auction could be very complicated… Maybe the solution is a pilot program [conducted] in an unserved area.”
“I don’t think any one idea has come to policymakers [on the Hill] as the ultimate solution” to USF growth, James Reid, aide to Sen. Rockefeller (D-W.Va.), said: “It’s very hard [and] compromises have to be made.” Reid added that “solid conclusions” must be made the next few years about “how much to give and get to have a sustainable program.” Rockefeller is clear on one thing -- he defines universal service as a way to assure his constituents access to the same telecom services as people elsewhere at comparable costs. There’s no “nuance” to his view on that, Reid said.
Panelists disagreed about whether the FCC should start using USF money to subsidize expansion of broadband services in rural areas. Zaina contended the 1996 Telecom Act actually allows such “evolution” -- a stance somewhat endorsed by Reid, who said the FCC is “not empowered to limit the fund.” But the FCC has to prove there’s “market failure” before funding a new service and that’s not the case with broadband, Garnett said. FCC data show “pretty rapid” broadband buildout in rural areas, and new USF-funded networks being built by rural carriers are capable of supporting broadband, he said.
“My concern is we don’t just take more money and throw it into a broken system,” said Einhorn, who noted AT&T gets very little high-cost funding. If policymakers decide broadband services should get USF subsidies, they shouldn’t just add it to the current “lopsided” system, he said. They should “make sure rural customers get the money and not just rural companies.”