Strand Counters CCIA Report on USF
Strand Consult last week poked holes in a recent study by the Computer & Communications Industry Association, which warned that a 5% USF fee on cloud service revenues, passed through to customers, would cause a hit to the U.S. GDP of up to $148.18 billion (see 2506030049). The study was written by Raul Katz, director of business strategy research at the Columbia Institute for Tele-Information at Columbia Business School. Katz modeled a 5% contribution rate, which would deliver $25 billion, “almost three times the current USF,” Strand said. “No policy maker had made such a proposal. The rate appears to be amplified on purpose to paint a picture of a doomsday scenario.”
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While Katz said a USF assessment on cloud services “will increase inflation and harm the economy, … he fails to consider that the cloud industry enjoys spillover benefits from the USF today which amount to $95 billion annually, from the thousands of schools, libraries, hospitals and other enterprises which subscribe to cloud service as a function of being assured broadband access through USF,” Strand said.