Each year, the Federal Communications Commission (FCC) directs the collection of approximately 18% of companies’ revenues from interstate and international telephone services and redistributes $4.5 billion of the funds to telephone companies offering mostly slow and limited internet access in rural areas.
Rather than promote the best that technology has to offer, Connect America Fund is a form of insurance – insurance for incumbent telephone companies against competition.
When I worked at the FCC, folks at the agency seemed simultaneously confident and puzzled about certain phenomena. Confident that it was too expensive to build fiber optic networks throughout rural America, and puzzled about how best to encourage the telephone companies to improve their networks.
The one mechanism never tried by the FCC was competitive pressure. Though the agency was once headed by a man who repeated as his mantra “Competition, competition, competition,” neither he nor his predecessors employed competition as a tool to spur investment in rural broadband…