Trick or Treat! Telecommunications Policy

The Taxpayers Protection Alliance is celebrating Halloween all week long as we present the Tricks or Treats of the federal government over the last year.  Taxpayers should be frightened as Washington, D.C. continues to waste money and pass onerous regulations that prolong the economic downturn.  The first creepy installment are the Tricks or Treats of telecommunications policy.  Net neutrality and retransmission continue to be the tricks and there is some treat (that may easily turn into a trick) with the Universal Service Fund.  Be sure to check back on Wednesday and Friday for two more sets of Tricks or Treats.  WARNING!! We advise strong parental guidance because some material may not be suitable for children since they are the ones that will ultimately be paying for these tricks.

TRICK: Net Neutrality or “The Creature from the Federal Communications Commission (FCC).” Set to go into effect on November 20, “Net neutrality,” which is loosely defined as a system that allows information on the Internet to move freely without regard to content is in reality, a not so subtle attempt to regulate (strangle) the Internet.  Net neutrality is a government takeover of the Internet that will cost taxpayers and consumers billions of dollars while stifling innovation.  There is even talk of the government having a ‘kill switch” so they can shut down the Internet in case of a cyber-attack.  There is no way of masking how bad net neutrality will be for taxpayers and innovation. (read previous blog posts here, here, and here.)

TRICK: Retransmission or “Airwave Snatchers.”  The Communications Act of 1934 was amended in 1992 to give broadcasters an advantage in negotiations with monopoly cable providers, granting broadcasters the right to choose between guaranteed carriage or insisting that multichannel video programming distributors (cable and satellite providers) obtain and pay for a station’s consent to retransmit the station to local subscribers.  Needless to say, the television landscape has changed drastically since 1992.  The fact is that there are no longer cable monopolies and broadcasters have a choice among many providers such as cable, satellite and fiber optic networks.  This has given broadcasters the upper hand in negotiations.

TREAT: Universal Service Fund (USF) or “Frankenstein gets a Makeover.” USF, which is supposed to bring telephone service to mainly rural areas, has its roots in decades-old laws that aimed to solve a problem that no longer exists. The Telecommunications Act of 1934 – yes, 1934 – aimed to subsidize the expansion of telephone service into rural America. More than 70 years later there is finally talk of reforming USF to modernize the current inefficient system and get rid of the high cost fund. While it may be a positive step that the FCC is considering changes to the USF that would have it evolve from telephony to broadband, if that change merely expands the program it could cause the fund to balloon even larger in size and impose even higher costs on consumers. The FCC must bring the USF, especially its “High Cost Fund,” under control.  The best outcome for taxpayers is the termination of the program and any plan that doesn’t end the monthly tax on telephone bills will be a trick and haunt taxpayers and consumers for years.  (read previous blog post here)