The Connect America Fund: Small Step or No Progress?

Carl Weinschenk

Yesterday, the Federal Communications Commission unanimously approved the creation of the Connect America Fund, which will have a $4.5 billion annual budget, and the reform of the intercarrier compensation system. The news is described in many places, including eWeek.

Not everyone is celebrating. The healthy skepticism extends to Jonathan Feldman's commentary at InformationWeek on the Federal Communications Commission's transition of the Universal Service Fund (USF) to support of broadband services.

Nobody disagrees with that goal. However, Feldman and the folks he quotes argue that the target speeds are too slow, that there are far better ways to achieve the goals, that incumbents telcos will end up with a lot of the money, that there is no local and municipal networks being leveraged and that there is no accountability in the bill.

And those are the things that Feldman and his contributors like about the proposal. (OK, that was a joke.) Those criticisms all seem relevant and important. Whenever I hear such a litany, however, I think of the old saying of not letting the perfect be the enemy of the good. I also think of early civil rights legislation. Those laws would be seen as a huge step backwards if proposed today, but, in the context of its time, they were great strides forward if for no other reason that they set the agenda for the future.

From a telecommunications point of view, the speeds the FCC is aiming at - 4 Mbps downstream and 1 Mbps upstream - seem about as contemporary as a disco night at a local pub. In the bigger picture, however, the key to considering the slow speeds and other pieces of the plan is a careful consideration of context.


The other problems noted by the piece - the lack of definition on oversight, the seeming reliance on the incumbent local exchange carriers (ILECs), the exclusion of a mechanism to work with local networks (such as Illinois and California) as well as the speeds - all seem damning.

The point is that the FCC, chairman Julius Genachowski and the administration for which he works are dealing with political problems of a radical nature. He most likely sought to neutralize some of the political opposition by getting a unanimous vote, which might temper the plan.

Going forward, the real question is whether the current administration wants to introduce a change with a first step that can measured in microns or just chuck it for the time being. It already is all about electoral politics: If the Republicans win the presidency, all bets are off and meaningful reform becomes less likely. If Obama wins a second term, Connect America can be given a reworking. This is especially true if the Democrats win back the House of Representatives and hold the Senate.

It is fair to point out, however, that many of the reservations are non-political. While a pragmatic argument can be made against ticking of AT&T and Verizon on political grounds, it is more difficult to justify lack of oversight on the same basis.

There is a lot to the complaints. But, at the same time, there is a lot to be said about making even the slightest move in the right direction. The Connect America Fund should be seen for what it is: that small first step.



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