IP Convergence: Beyond VoIP, Beyond Cost Savings

As Gomer Pyle once said, “Surprise, Surprise, Surprise”.

As you may all know, the FCC recently took a position that broadband internet access is an information service and therefore should be exempt from paying into the Universal Service Fund (USF).

USF was created during the dawn of the telecommunications boom era in 1996 to insure that rural America had access to the same services that were being deployed in urban areas. Without USF, rural America could have been left in the dark ages.

Today, Verizon announced their plans regarding USF and their broadband offers.

Well, Verizon will be following suit by removing the USF charge, but will also add a surcharge that basically amounts to what their users pay in USF.

Their rationale is that Verizon needs to recover their investment.

What?

So far Verizon has done very well with their lobbying efforts in government. Remember they have also been successful in excluding their fiber to the home build-outs from the CLEC unbundling rule – same argument , need to recover their investment.

Here’s a fact, DSL is a tariffed service, meaning the price is set by justification of costs for each market served by a state’s Public Service Commission.

The prices they charge are justified by their investment to insure fairness in local competition. So, how can they argue that a surcharge is needed to justify investment return outside of this process?