USF - Pork Barrel for Politicians (END USF NOW!)

When I recently wrote about how the telecoms are using USF as a political tool to gain advantage over VoIP providers, I failed to explore how it is used by the politicians themselves. In Gordon Cook's excellent blog Cook's Collaborative Edge, he points to an article by Andrew Walden in the Hawaii Reporter with an example of our elected officials stealing our money to help their constituents. How about $500 Million for a new fiber optic communcations network which serves only 5,400 homes?:

In a little-noticed May 16 2005 ruling, the Federal Communications Commission (FCC) has granted a waiver necessary to allow Sandwich Isles Communications to complete construction of its $500 million project to link 69 Hawaiian Homelands properties with a fiber optic communications network.

Walden points out that these 5,400 homes already have land lines from Verizon and that satellite based high speed Internet access would cost just $600 or less per home (as opposed to the $93,000 per home hand out from USF). Walden continues in his article, "Unsurprisingly, Sandwich Isles is led by many politically connected directors and corporate officers." According to the article, this was one of the last acts of the FCC under then-chairman Michael Powell, who the article claims was a Naval Academy classmate of Al Hee, president of the company receiving the $500 million. Much more detail and accusations available in this web posting - Vultures of Sandwich Isles.

Cook also points to a terrific study by Thomas Hazlett at George Mason University entitled UNIVERSAL SERVICE FUND SUBSIDIES: WHAT DOES $7 BILLION BUY?

Note to Meg Whitman: Open up Skype!

I am going to be more diligent about promptly posting links to my VoIP magazine columns, starting today. So here is the latest - my open letter to eBay's Meg Whitman urging her to open up the Skype protocol. Meg -- it's going to happen anyway, so why not drive the process and benefit from it? And, as I point out in the column, this could be one of the best ways to fight monopoly telecom, as opposed to sending emails to eBay's users...

Read the full article at VoIP Magazine.

Universal Service or Carrier Bankroll?

My latest opinion piece is up on the VoIP Magazine website. Well, its been up for a week or so, but hey - it's summertime and I've been busy. You probably have been too, so you haven't had a chance to read the latest issue of the magazine (oh yeah, and its only online now). But you should get over there and read my suggestion for solving the latest brouhaha entangling the FCC with their owner/operator telecom companies. My solution to the conflict over the "universal service fund?" End the program. Think I'm crazy? From the article:

Frankly, the goal of universal service has not been achieved over the past 20 years, even after spending $50 Billion dollars. Over the life of the fund this spending resulted in the addition of one phone line for every $16,000 spent. And there are still 5 million households in the US currently without telephone service.

Read the rest at VoIP Magazine

Must Read: John Battelle interviews Vint Cerf on Net Neutrality

Just one of the gems in this must read interview of Google's Vint Cerf by John Battelle -- Vint Cerf paraphrasing AT&T CEO Ed Whitacre:

Here's what (folks like Whitacre) are saying: “Well, we built this network and we can do anything we want with it. And by the way, the FCC has now essentially released us of any common carrier obligations we ever had, thank you very much, and so we can do whatever we want to and why don’t you just buzz off.”

Title: Cerf, Part 1: Excuse me, but we don’t get a free ride at all

Summary: Fortune recently ran an interview with Google's Vint Cerf (I think it's in the current issue, it's not up on the site yet). That was unfortunate for Business 2.0, the magazine where I do interviews, b...

Death and Taxes

If you ever needed proof that the Telecom industry is using their considerable power and wealth to make the people's government into a tool for executing their own anti-competitive strategies, look no further than the recent ruling on USF (Universal Service Fund). If the telecom industry gets its way, we'll have a whole new saying about death and taxes -- the only thing sure about government control by monopolist telecoms is death by taxes.

Not such a bad idea in 1934 when the government determined that a need existed to provide every person (no matter how remote) in our great country with access to the phone system and that many such rural areas could not be profitably served. Since AT&T was a monopoly telecom provider, the government used a tax on AT&T to nudge them to do what was right for the country's citizens - provide universal access to the telephone system, regardless of how unprofitable a given rural phone line might have been to set up and operate.

Fast forward 72 years -- what is USF today? A tool for the monopolies to use to crush competitors - first cable companies and now VoIP. Jeff Pulver has a very good analysis on his blog in which he summarizes in part:

• Is not limited to calls that touch the PSTN – includes IP to IP calls (pg 20)
• circumvents the Vonage decision to allow state regulation of VoIP, if you report actual revenues (pg 29)
• requires pre-approval of traffic studies – but not for wireless providers because pre-approval would be disruptive to wireless, but not VoIP (pg 30)
• requires double payments of USF fees for 2 quarters – waiving the “carrier’s carrier” rule so that wholesale providers also have to pay USF for the same service (pg 30)
• Includes new VoIP registration requirement with the FCC
• does not include a transition period
• indicates a desire to expand the definition of Interconnected VoIP in the future (pg 20)
• includes international traffic
• ignores Small Business Administration arguments (pg 121)
• Does not discuss this decision’s impact on VoIP providers, but finds it will have minimal impact on LECs (pg 13)
• requires VoIP providers to pay into USF at the highest rate of any service
• buried deep in footnote 209, relieves DSL of USF obligations

The good news is that VoIP can route around this damage - first, disconnect from the telcos. They don't want our business. Fine. Let's all move more quickly to IP -> IP connectivity for our calls. Second, to the extent that you have to make a call into a Telco, connect via another country. Canada is 5 cents a minute to the US. France has extra bandwidth into the US available for pennies per minute in bulk. Or there is another option. Like Ebay's Skype, give away the minutes for free (and I guess, make your money somewhere else). The government can only tax you if you are making money...

Meanwhile, let's remind congress and the FCC that the SERVE THE PEOPLE, not telecommunications companies.

Happy 4th of July.