Outdated subsidy? We’ll find a new purpose for that…

An article in the Albuquerque Journal’s Business Outlook section yesterday (subscription required) focused on the Universal Service Fund and the fact that Qwest, which has major operations in New Mexico, has called the Fund “outdated.” In case you don’t know, the Universal Service Fund is one of those line items on your phone bill that turn a $14 bill into a $28 bill.
Specifically, it is a nearly 12 percent surcharge on phone bills to subsidize phone service in rural areas, mountain communities and other places where installing equipment and making a profit would be difficult. Now, I know that New Mexico is one of those areas that have probably benefited disproportionately over the years from this subsidy, but with the fund at $4 billion and few in need of the subsidy, one might think that Qwest would ask for the fee to be dropped entirely since it impacts their customers.
Not so, instead Qwest and some federal lawmakers have proposed using some of the funds to provide hard-to-reach customers with broadband service. Great, now we can all subsidize broadband service for Ted Turner’s house.

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