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.
Our Findings
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.
Our Recommendations
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. He is a former deputy director and acting director of the Office of Policy Planning at the Federal Trade Commission. His research interests include regulation especially with regard to technology and networked industries.
As director of the Government Accountability Project at Mercatus, Maurice McTigue is sharing the lessons of his practical experience as a New Zealand member of parliament, cabinet minister, and ambassador with policy makers in the United States. He works with officials in the Administration, members of Congress, officials from federal agencies and state governments on applying the principles of transparency and accountability in the public sector.
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