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Monday, June 17, 2019

Let's be more demanding

Well, that's not good.

The USF Contribution Factor is going up.  Way up.  To a record-setting level.  That's not good for the E-Rate.  Because some of the Commissioners will cast this as a tax increase due to unrestrained spending, and it's going to encourage them to inflict all sorts of caps on Universal Service.

Is it a tax increase?  Technically, no.  The GAO and CBO have both complained that it isn't a tax.  But really, if the government makes you give up some of your money, and the government decides how that money is spent...well...sorry, but that's not a "contribution."

Is it due to unrestrained spending?  Let's look at the numbers.  Wait, I can't find a table of USF contribution calculations over the years?  Hang on, I'll build one.  At least the FCC has a page of the Contribution Factor orders going back to 2000.  Here's my compilation.

But I like my data in pictures, so here are two simple graphs that explain why the contribution factor keeps going up.  First, look at the total revenue from which the USF is drawn (revenue in billions):

Next, look at the how much money the USF programs need (demand in millions):

So clearly, we're looking for a lot more money from a much smaller pool.

But let's take a closer look at the components of that increase in demand:

Let's unstack that graph, so you can look at the growth and relative demand for each program:

In 2000, the E-Rate and High Cost were the big boys in the fund, but while the High Cost fund has more than doubled, the E-Rate bumped along at about the same demand, losing ground recently.  Meanwhile, Low Income spiked around 2012, but has dropped recently, and while Rural Healthcare has grown the most in terms of percentage, it's still the smallest program.

I can't resist playing with the graphics, so I'm going to pull out each program, adjust the scale to fit that program, and add a trendline.  This will show us which programs have been growing fastest.

Seems pretty clear which program is not to blame for the increase in demand.

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