The proposal is a laudable one, representing the next wave of 21st century infrastructure investment that the President discussed during his prime-time speech. And according to data that our organization released this week, USF reform would result in 90,000 new jobs thanks to new broadband construction and the ability for businesses to expand with new high-speed Internet access.
First, the plan proposes modernizing the USF program by ending the current support paid to companies for deploying traditional telephone services in high-cost (generally rural) areas and redirecting these dollars to broadband services.
In addition, the plan recommends dramatically reducing hidden telephone company subsidies, called switched access charges. Consumers detest hidden fees and these fees need to end. By removing these fees, the result will bring more transparency and clarity and ultimately cheaper phone service for consumers.
Finally, one of the major benefits of USF reform is that broadband expansion has a sizable economic multiplier effect. Unlike most traditional infrastructure investments, broadband expansion will mean that businesses in rural and underserved communities will have the technology they need to expand their consumer base and reach new markets. Consumers will have access to a wide breadth of new products and services that were otherwise impossible to reach.
And there are other tangible benefits to investment in new broadband services, including new access to remote healthcare services and significant distance learning and education advancement opportunities. All this will mean a much more effective use of taxpayer funds that will help close the lingering gap in broadband access.
Reforming USF represents a smart government policy that the FCC can implement in short order without being delayed by partisan bickering. Both Democrats and Republicans agree that the fund is outdated and in need of updating, and so far the telecom industry seems to widely support the effort. Six major tech companies even filed a plan with the FCC called “American’s Broadband Connectivity Plan.”
President Obama certainly made his case this week that policymakers at all levels need a laser-like focus on job creation and private sector empowerment. It starts with policies like USF reform that represent bipartisan agreement, smart government efficiency, and most importantly, a much-needed boost in job creation that doesn’t cost taxpayers another dime.
Steve Pociask is president of the American Consumer Institute Center for Citizen Research, a 501c3 nonprofit educational and research institute.