Universal Services Fund fraud, present and future

The definition of insanity is said to be doing the same thing over and over again, while expecting different results. If that’s the case, when it comes to telecom policy, the federal government is definitely certifiable.

Here’s what came out of the geniuses in Washington in the waning weeks of summer:

1. A report and order (R&O) issued by the FCC highlighting numerous failures of the universal services fund (USF) since its inception in 1998 — along with partial measures the FCC plans to take to improve the services in future (more on that in a second).

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The definition of insanity is said to be doing the same thing over and over again, while expecting different results. If that’s the case, when it comes to telecom policy, the federal government is definitely certifiable.

Here’s what came out of the geniuses in Washington in the waning weeks of summer:

1. A report and order (R&O) issued by the FCC highlighting numerous failures of the universal services fund (USF) since its inception in 1998 — along with partial measures the FCC plans to take to improve the services in future (more on that in a second).

2. A statement by FCC commissioner Jonathan Adelstein to the Senate committee on commerce, science, and transportation calling for a national broadband initiative.

In case you’re not seeing the connection: The last time the FCC tried to implement a universal services initiative, the result was so bad that they had to spend the decade fixing things — and they’re not finished yet. So what’s up next? Launching yet another universal services initiative — this one focusing on broadband.

Hello! That’s like saying if you don’t have the engineering skills to build a garden shed, your next project should be erecting a 50-story skyscraper. It takes the above definition of insanity to a whole new level.

Don’t get me wrong: I think universal broadband service would be an awesome idea (along with free beer and pizza every Friday night). But before we go investing taxpayer dollars in an ambitious telecom initiative, let’s have a look at what went wrong on the last one:

No oversight. As the Report and Order states dryly, “In 1998, the Commission appointed the Universal Services Administrative Company (USAC) the permanent Administrator of the federal universal service support mechanisms…subject to a review after one year by [the Commission]…however, the one-year review did not take place.”

Yes, you got that right. The USAC operated for the past nine years with no real oversight from the FCC. Guess that’s why the Gambino crime family managed to collect some $22 million from the USF before getting caught in 2005. (You can’t make this stuff up: Click here.)

No performance goals. You’d think a basic measure of the effectiveness of any program — government or private — would be how well it performs against goals. But that presupposes there were goals in the first place. As the R&O points out, despite the fact that the FCC was specifically chartered to develop specific, detailed goals, the USF program lacked them until… last week. (But hey, they’ve got ‘em now!)

The best part of all this is that there are no explanations from the FCC as to why all this happened in the first place. Yes, I give them credit for trying to fix it, however belatedly. But come on, guys — if you don’t know what broke the first time, why should we trust you to fix it now? Let alone to launch “Universal Services Fraud, Take Two: Universal Broadband”?

If it’s all the same to you, fellas, I’ll stick with beer and pizza.

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