ITIF Statement in Support of “America’s Broadband Connectivity” Plan

[Ed: Here’s the press release we issued at ITIF today on the ABC Plan for phasing out telephony subsidies and bulking up the stimulus program for rural broadband. All telecom wonks passionately agree that the Universal Service Fund for telephony is in desperate need of reform – it’s the poster child for “waste, fraud, and abuse” of the federal budget – but ABC is the first reasonable step forward. A lot of work remains to be done, but this is great framework.]
July 29, 2011

WASHINGTON – The Information Technology and Innovation Foundation today praised a proposal by six of the nation’s leading broadband providers to expand access in rural communities. The proposal, filed at the Federal Communication Commission, would reform the Universal Service Fund (USF) Program and Inter-Carrier Compensation System (ICC) to expand broadband access.

“The ‘America’s Broadband Connectivity’ (ABC) Plan is a bold and significant step forward in the ongoing quest to improve our nation’s rural communication networks. The ABC Plan lays out a precise timeline for the phasing-out of the subsidies for the rural telephone network and for the simultaneous phasing-in of broadband service in its place. Upon completion, the Plan will provide robust broadband service throughout rural America of sufficient quality to support Voice over IP (VoIP) as a substitute for ‘plain old telephone service’ (POTS) as well as advanced applications for commerce, health care, and education.

The Plan is built on a sound economic model that normalizes intercarrier compensation fees and ends current practices that artificially inflate both costs and prices of rural telephony such as ‘traffic pumping’ and ‘phantom traffic.’ At a time when urban consumers are shifting their interpersonal communication from the legacy telephone network to broadband-enabled VoIP, the Plan ensures that rural consumers will not be left behind.

The Plan caps prices that will be paid to providers of rural broadband to sensible and sustainable levels, employs reverse auctions to leverage competition, and alternative wireless technologies where they’re most appropriate. ABC represents a broad industry consensus that is technically savvy, consumer-friendly, and fiscally prudent. It’s the most significant concrete step toward the full transformation of the Universal Service Fund into a broadband stimulus program that we’ve seen.

ITIF applauds the plan and endorses the principles and timelines it articulates.”


Through its research, policies proposals, and commentary, the Information Technology and Innovation Foundation is working to advance and support public policies that boost innovation, e-transformation and productivity. For additional information, visit ITIF at or contact Steve Norton at (202) 626-5758 or [email protected].