NTCA –The Rural Broadband Association, has become the undisputed national champion of small, rural telecommunications and broadband service providers. In our May 14th blog, we partially quoted NTCA CEO Shirley Bloomfield’s enthusiastic endorsement of the proposed House bill to add broadband services to the USF contribution base.
Now, in a recently released study, NTCA has refuted, or at least blunted, the assertion that such a broadening of the base would undermine the adoption and retention of broadband services. The Berkeley Research Group surveyed consumers to assess preferences in procurement of communications services. Survey results and economic analysis of broadband demand showed that the impact of including a USF contribution surcharge on broadband services would have little, if any, impact.
The study concludes that a broadband contribution surcharge of 1% could reduce broadband demand by .08%. Assumptions of an $80 per month price for broadband, with an $0.80 increase as a USF contribution surcharge, indicated that only 1 single consumer – at most – might reduce his broadband purchase in some way. A miniscule impact, indeed.
CEO Bloomfield rightly summed up this entire issue, saying “Our nation depends upon practices that both advance and sustain critical communications services for all Americans, and for this reason, the long-term viability of the Universal Service Fund is essential…(but) the good work done to date could be at risk if we keep ‘kicking the can down the road’ on addressing the shaky foundation of an ever-escalating and volatile contribution mechanism.”
This study clearly demonstrates that a small additional charge on broadband services, to bolster the USF contribution base, will have little effect on broadband demand, adoption or retention. Coupled with the stabilization of critically important USF funding, it should go a long way toward convincing legislators, regulators and others of its sound basis.
And, most importantly, it is necessary to assure continuation of the long-standing goal of universal service at reasonable rates.
