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Flavors of universal access

You can actually see your universal access dollars at work if you know where to look. For example, while on vacation a couple of weeks ago I drove along Notom Road, a 35 mile long "unimproved" dirt road just east of Capitol Reef National park in southern Utah. This is empty country. Well, actually quite full of stark beauty, but empty of almost everything else. It is a few dozen miles to the west of where some people believe NASA filmed the moon landings. Yet every few hundred yards for more than half the length of the road there were little off-green boxes along the roadside. I saw the same type of boxes along most of the 3,000 miles of back country roads we traveled during this vacation in the 4-corners area . These boxes are the surface access points for underground telephone cables. Buried cable is far more reliable than cable strung along phone poles and the landscape is far better off to not be cluttered with the poles and wires.

In the case of Notom Road, there is a small farm about 5 miles south of route 24, the main (in the context of the area) highway, and another one about 15 miles further south. So there are 20 or so miles of buried cable to service two small farms, probably with a single phone each. These phones would be very expensive to the subscribers if it were not for the universal access fund which is used to help pay for the cable installation. The same fund is also used to offset some of the other costs which make it quite a bit more expensive to operate a phone service in a low density rural area than a high density urban one.

Now the FCC has ruled that the same universal access fund should be used to help offset the cost of Internet services for non-profit K-12 schools with an endowment of less than $50 million and libraries. Eligible schools and libraries will "receive discounts of between 20 percent and 90 percent on all telecommunications services, Internet access, and internal connections provided by telecommunications carriers, subject to a $2.25 billion annual cap." (http://www.fcc.gov/ccb/universal_service/fcc97157/) In addition the FCC extended the discounts to non-telecommunications carriers such as Internet service providers (ISPs). The level of discount is determined by the percentage of students in the national school lunch program and whether the area is urban or rural. The school lunch program was chosen because it has a well-defined set of criteria that reflects family rather than community income. Rural schools and libraries will get a bigger discount than urban ones because the list price of the services is higher in rural areas.

The whole question of universal access is a hard one. Any universal service plan, no matter how well designed, as I think this one is, increases the costs to some users in order to reduce the costs to other users. It will be interesting to see if the better off continue to feel that the unrestricted view and now, the better educational opportunities are worth the additional costs.

disclaimer: Harvard is not in the K-12 business and anyway, its endowment somewhat exceeds the cap, so the above views are my own.