In an interview published in the June 7 Wall Street Journal, FCC Chairman Julius Genchowski generally sounded good. But the policy devil, again, is the in the details.
On the FCC’s broadband plan, for example, Genachowski said:
We run something at the FCC called a Universal Service Fund. It's an $8 billion-a-year fund that's actually done a good job over the last decades promoting universal telephone service. This fund and the people who run it wake up every day and put money into yesterday's telephone network. So, one of the recommendations of the plan is we obviously need to transform this fund so that it's smartly, efficiently supporting broadband communications, not telephone service. This court decision raises questions about whether we have the authority to do that. It's crazy not to do it. The chairmen of the Senate and House Commerce committees, which have jurisdiction in these areas, have said that they're starting a process to look at a legislative fix.
In reality, what Genachowski is talking about here is expanding government taxes on and subsidies for broadband services. Taxes only wind up increasing costs for consumers, including small businesses, while subsidies create distortions and inefficiencies.
Leave broadband investment and deployment to the market, i.e., to competing firms working to serve current and new markets.
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
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