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Sunday, March 31, 2019

A shell game, only with caps

Am I the only one who is starting to feel like this?
[If you aren't familiar with the children's book Caps for Sale, I recommend it.]

The E-Rate was born with a $2.25 billion cap on it.  Then we added a cap on Category 2 spending.  Now the FCC is thinking about putting a cap on overall spending in the Universal Service Fund (USF).  Enough with the caps already!

To be precise, what we know publicly is that Chairman Pai has circulated an item suggesting that the Commission release an NPRM about "Universal Service Contribution Methodology."  Apparently, by circulating the item, he has allowed the Commissioners to vote privately on the measure instead of voting in a public meeting.

Commissioner Rosenworcel and Senator Markey (who's like godfather of the E-Rate or something) have already expressed their displeasure.  Commissioner O'Rielly has expressed his support.

To me, the best argument against this overall cap comes from Commissioner O'Rielly: "Fact: 3 of 4 USF programs already have hard spending caps & the other has a soft cap requiring Commission action if it were exceeded.  An overall cap doesn’t add new budgetary pressures than those that already exist!"

In other words, "This proposal has no effect."  If it doesn't do anything, let's not consider it.

Of course, it could have an effect, and if it does, it won't be a good one for our little patch of the USF.  I don't see the E-Rate needing a cap increase, unless they bring back voice or increase the C2 cap, but if other programs need more cap space, it would mean reducing the caps of other programs.

There is an effort underway to increase the cap over at Rural Health Care, but that program is small enough that it wouldn't significantly affect the other programs.

I think this cap is all about the Lifeline Program.  USAC has determined that 10.7 million households participate in the program, but 39 million households are eligible.  So if even half the eligible households were funded, the cost of the Lifeline Program would increase by around $1 billion.  And wouldn't you know, the Lifeline Program is the one with the "soft cap."

So instead of putting a hard cap on Lifeline, the FCC wants to put a hard cap on the whole USF.  Why be so indirect?  I mean, I can see how it looks bad to say, "We're only going to provide enough funding to serve 28% of the people eligible for the Lifeline program," but who would notice?  Currently, 72% of the people eligible for the Lifeline program haven't noticed it exists.

Don't put another cap on 3 other programs just because Lifeline isn't capped.

1 comment:

  1. Commissioner O'Rielly has posted to his blog on this: