USF legislation could be a game-changer for broadband innovation

[1]It's difficult to see the potential diamonds of innovation in the rough phase our current economy, but proposed legislation to reform the Universal Service Fund could result in broadband innovations - if people with vision see the light. The challenge, of course, will be in getting from here to there once the light bulb goes off.

This is a good time to talk about innovation. The big incumbent telcos have been pushing that button hard as part of their anti-net neutrality campaign. "If you pass net neutrality rules, Internet innovation will die on the vine because we'll stop spending billions to innovate." To hear them tell it, you'd think without incumbents we'd still be in Dark Ages of Internet advancement.

Then earlier this month this headline pops up in an industry media outlet, "Telecom Lagging in Innovation Approach, Successes." Accenture, neither a slouch in research, nor an entity vested in net neutrality, released a report [2] that reveals 42 percent of telecom executives said their innovation focus was on small alterations, such as changing price points. As Adi Alon, a senior executive in Accenture's Growth and Innovation practice states, "That doesn't lead to breakthroughs in new business or service models." The report goes on to paint a picture of an industry sorely lacking in innovation.  

Last week, there was a legislative hearing to discuss a draft for legislation from House Representatives Rick Boucher (D-Va.) and Lee Terry (R-Neb.) to reform the Universal Service Fund (USF) [3]. The USF collects money from telcos and distributes it into programs to bring communication services to rural areas where it is otherwise cost prohibitive to do so. Boucher and Terry want to divert a portion of the USF, anticipated to cap at $7 billion, to support broadband projects in these areas.

Universal Service Fund Reform could be a game changer

The High Cost Fund is the specific USF program that would support the broadband funding. Currently it provides vital telephone services (and occasionally some broadband projects are funded) for which many are thankful. But there probably isn't much resulting from this you'd call innovative. This can change if creative people are willing to influence the hearts and minds of those writing and eventually voting on the reform bill, as well as inspire the business thinking of rural telecom companies that are intended fund recipients.

Congress should change the High Cost Fund into a Digital Communication Enhancement Fund. Just nuke once and for all this concept that there are separate worlds of voice communication and data communication. It's a digital world now, folks! Voice can be reduced to 0's and 1's similar to everything else we use to communicate information. Our legislation and rules for grants need to reflect and reinforce this reality...Continued [4]

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