“This is the stupidest system I have ever heard of!” was how one of my students — a telecommunications regulator from South Africa — assessed the Federal Communications Commission’s (FCC) system for subsidizing telecommunication during a presentation of my research center’s flagship international training program a few years ago. My guest lecturer nodded sadly and offered, “This is an example of what not to do.”
What would happen if the US Department of Energy decided to help low-income households afford solar power by giving money to companies that report that they lease solar panels to these households? In all likelihood, fraud would be a difficult and costly problem, and solar companies would benefit more than the households. Despite the obvious flaws of a system in which companies receive money based on their service claims, this is essentially how the Federal Communications Commission’s (FCC) Lifeline program works: Telecommunications companies receive money based on how many households they claim as Lifeline customers. There is a better way — a direct subsidy would be more beneficial to low-income households.
There has been a lot of discussion lately about how the Federal Communications Commission (FCC) should be organized. Several news organizations mentioned that this was a topic of discussion as part of the work of the FCC transition team for President Donald Trump. (Full disclosure: I was a member of the team. My work there was confidential and the opinions I express here are my own.) Modernizing the FCC was discussed at the recent State of the Net program, and there was much agreement that the staff structure limits technical analysis. Larry Downs discussed the staff structure in a Forbes article, as did Bret Swanson in his recent TechPolicyDaily piece.