The FCC collects mandatory "contributions" from providers of interstate telecommunications services to subsidize rural telephone companies, phone service for low-income households, communications services for rural health care facilities, and Internet access for schools and libraries.
The FCC has sought comment on a variety of administrative issues, including performance measures.
As established in the Telecommunications Act of 1996, universal service programs are based on three assumptions:
Universal service programs cause affordable access to communications services.
Affordable access causes an increase in subscription or connectivity.
Increased subscription or connectivity improves economic, social, educational, and health outcomes.
Effective performance measures should tell use whether these three things are occurring.
The FCC should immediately develop performance measures that show how universal service programs have affected access, affordability, and connectivity to communications services.
Over the longer term, the FCC should measure the extent to which universal service programs improve economic, social, educational, and health outcomes.
In all cases, the FCC should assess the extent to which the universal service programs have actually caused the observed changes in the performance measures.
Jerry Ellig is a senior research fellow at the Mercatus Center at George Mason University and a former assistant professor of economics at George Mason University. He specializes in the federal regulatory process, economic regulation, and telecommunications regulation.
The Honorable Maurice McTigue, QSO, is vice-president at the Mercatus Center at George Mason University. He is director of the Mercatus Center’s Government Accountability Project and a member of its Spending and Budget Initiative and State and Local Policy Project.