{"id":201,"date":"2004-08-18T16:21:57","date_gmt":"2004-08-18T16:21:57","guid":{"rendered":"https:\/\/viodi.com\/classic\/2004\/08\/18\/article1-25\/"},"modified":"2023-08-13T18:27:19","modified_gmt":"2023-08-13T18:27:19","slug":"article1-25","status":"publish","type":"post","link":"https:\/\/viodi.com\/classic\/2004\/08\/18\/article1-25\/","title":{"rendered":"USF Overview"},"content":{"rendered":"\n<\/p>\n

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Indie Telco Local Content Workshop Information<\/a><\/p>\n

Quick Jump Menu to this Issue’s Articles August 18th, 2004 Overview USF Overview: My Dream as to how to Restructure USF’s Funding: The Independent Telco Space According to Viodi: <\/p>\n

USF Overview<\/b><\/b><\/p>\n

by Ken Pyle (ken.pyle@viodi.com), Viodi, LLC<\/a><\/p>\n

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About Viodi, LLC<\/a> <\/p>\n

August 18th, 2004 Issue<\/strong><\/p>\n

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[Editor’s Note: Many thanks to Mr. David Irwin,<\/strong> Managing Partner, Irwin, Campbell & Tannenwald, PC and Director of the Institute for Communications Law Studies at the Catholic University Law School, for his insight and assistance with this article. His comments regarding the telco industry are always very valuable. Come to the IP @ Telecom 04<\/strong><\/a> conference to hear him provide an overview of what is required from a regulatory standpoint for telcos to add video services.]<\/p>\n

With passage of the Telecommunications Act of 1996, the Universal Service Fund <\/strong>was set up by the Federal Government to ensure access to telephone service to all Americans, regardless of income or geographic location. The USF is funded by surcharges<\/strong> in wireline or wireless phone bills. These monies are distributed to telephone companies serving \u201chigh-cost\u201d areas to ensure that people living and working in these areas can, afford local telephone service. I will leave the argument for or against the USF for another day, but the reality is that USF in some form is not going away, as indicated by the proclamations of both President Bush and Senator Kerry that broadband should be available<\/strong> to all Americans, which would imply an expansion of today\u2019s program. <\/p>\n

The two big challenges<\/strong> with USF are; 1) maintaining revenue flow<\/strong> into the fund and 2) distribution<\/strong> of the funds to qualified parties in an equitable manner. This article will only address an alternative way of funding USF. Currently, USAC<\/strong> (Universal Service Administrative Company) a quasi-Federal Government-private organization administers this approximately 5.5 billion dollar<\/strong> fund (page 2 of 2003 annual report). <\/a> In 2003, 3.27 billion of the fund went to \u201chigh cost\u201d areas, while the remainder funded low income telephone customers, rural health care and schools and libraries.<\/p>\n

The Telecommunications Act of 1996 defined two types of services; \u201cTelecommunications Services<\/strong>\u201d (e.g. Plain Old Telephone Service, POTS) and \u201cInformation Services<\/strong>\u201d (e.g. the Internet). A special fee to fund universal service is mandated for Telecommunications Services, while Information Services are exempt from this requirement as well as most federal regulation. The USF fee appears as a line item on the monthly telephone bill and is currently set at 8.9%<\/a><\/strong> of a telecommunication\u2019s interstate revenues. <\/p>\n

The challenge in maintaining USF funding is that, as POTS lines decrease because of substitute products that are deemed \u201cinformation services\u201d, the amount of money flowing to USF decreases. The concern is what OPASTCO<\/strong> calls a \u201cdeath spiral<\/strong>\u201d, which will occur when the USF fee has to increase to cover the same costs with fewer and fewer POTS lines. This argument further suggests that raising the USF fee will accelerate erosion in POTS lines until such a point is reached that USF cannot effectively be funded. Right now there is a significant opportunity for arbitrage<\/strong> between information services that are very similar in nature to Telecommunications Services. <\/p>\n

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All displayed trademarks, logos and service marks are the property of their respective owners. \u00a9 2004, Viodi, LLC<\/a>. All Rights Reserved<\/p>\n

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\"Learn
Learn About Telecom04<\/a><\/p>\n

IP Video Conference Agenda<\/strong><\/p>\n

Economic and Product Feature Considerations for Telecom Network Architectures<\/a><\/p>\n

The Consumer Electronics Interface \u2013 Can You See Me Now?<\/a> <\/p>\n

Regulation 101 \u2013 What a Telco Has to Consider When Deploying Video & Other New Services <\/a><\/p>\n

Equal Access for All<\/a><\/p>\n

Telco Content Options<\/a><\/p>\n

Get in the Game \u2013 How do Games Play in a Service Providers\u2019 Plans?<\/a> <\/p>\n

Advertising and other Alternative Revenue Sources <\/a><\/p>\n

Integrating VoIP Content Into a Telco\u2019s Bundled Service Offering<\/a><\/p>\n

Making Sticky Bundles \u2013 Baking up new ways to gain and retain customers <\/a><\/p>\n

Link to Registration Page<\/strong><\/a><\/p>\n

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Indie Telco Local Content Workshop Information Quick Jump Menu to this Issue’s Articles August 18th, 2004 Overview USF Overview: My Dream as to how to Restructure USF’s Funding: The Independent Telco Space According to Viodi: USF Overview by Ken Pyle (ken.pyle@viodi.com), Viodi, LLC \u00a0 About Viodi, LLC August 18th, 2004 Issue Subscribe to Viodi View […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-201","post","type-post","status-publish","format-standard","hentry","category-newsletter"],"_links":{"self":[{"href":"https:\/\/viodi.com\/classic\/wp-json\/wp\/v2\/posts\/201","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/viodi.com\/classic\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/viodi.com\/classic\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/viodi.com\/classic\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/viodi.com\/classic\/wp-json\/wp\/v2\/comments?post=201"}],"version-history":[{"count":1,"href":"https:\/\/viodi.com\/classic\/wp-json\/wp\/v2\/posts\/201\/revisions"}],"predecessor-version":[{"id":805,"href":"https:\/\/viodi.com\/classic\/wp-json\/wp\/v2\/posts\/201\/revisions\/805"}],"wp:attachment":[{"href":"https:\/\/viodi.com\/classic\/wp-json\/wp\/v2\/media?parent=201"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/viodi.com\/classic\/wp-json\/wp\/v2\/categories?post=201"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/viodi.com\/classic\/wp-json\/wp\/v2\/tags?post=201"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}