According to a recent report penned by Criterion Economics and funded by Verizon Wireless, billions of dollars in Universal Service Fund subsidies have been "simply wasted" because they were largely ineffective in bringing cellular service to high-cost, under-served markets. The report could hurt top USF recipients, including Alltel, AT&T, Sprint Nextel, U.S. Cellular and others.
"Overall, my analysis demonstrates that, to the extent subsidies to wireless CETCs are intended to increase the availability of wireless service in high cost areas, the vast majority of funds are simply wasted," wrote Nicholas Vantzelfde, author of one of the Criterion studies in the report. "There are many areas of the U.S. where wireless coverage remains inadequate, but the current programs do not effectively target coverage to those areas."
The report claims that most of these so-called "under-served" areas where USF-backed and subsidized service providers are also served by non-subsidized carriers (like Verizon Wireless). According to the findings, the subsidized carriers offer less than 4 percent of incremental coverage over the non-subsidized carriers in most of these areas. The subsidies are also duplicative: 52 percent of households covered by subsidized carriers have access to multiple subsidized carriers.
For more on the report:
- read this article [1] from RCR News
Links:
[1] http://rcrnews.com/apps/pbcs.dll/article?AID=/20070623/SUB/70622030/1005