It was fun, in a wonky but not a theatrical sense, listening to Tuesday’s FCC meeting on Universal Service and Intercarrier Compensation Reform. All five Commissioners eloquently described the need for reform. The framework, which came out of the National Broadband Plan (which borrowed much from the work over the last decade by many others, including Chairmen Kennard, Powell and Martin) is commendable. It’s progress that concepts, such as using reverse auctions or setting up a cap-ex fund, once controversial, are garnering a consensus. While I haven’t read the NPRM, I know the staff filled in many of the details the Plan did not cover and made adjustments as the math merited; both to their credit. It’s a big step forward.
But like the dog in the Sherlock Holmes story whose lack of bark was the critical clue, what didn’t happen was the most interesting part. I heard what each thought was wrong but I didn’t hear how they would each make the necessary trade offs or prioritize addressing different needs. To illustrate my point, take Commissioner McDowell’s statement that we have to shrink the size of the fund. Given its growth (particularly during his time on the Commission) who could argue?
The non-barking dog in the guise of a math problem, that’s who. It appears the Commissioners all also believe we need to spend more than we currently spend on unserved areas, a mobility fund and a recovery mechanism for intercarrier compensation reform. If we are being honest with ourselves, we probably have to spend more for schools and health care facilities (because of the opportunities that high-quality two way video presents for both) and support for low-income adoption (broadband is more expensive to provide than voice). Rob may disagree on the last two—a worthy debate–but I suspect he does not on the first three. So if we are going to shrink the fund—or even if we are only going to keep the program the same size–we are going to have to make significant cuts from existing programs. Rob’s poetic invocation of the need to cut was not matched with prose detailing how. (I don’t mean to pick on Rob….actually, that’s not true. Given how his Blue Devils came back to beat the beloved Heels last night, karma demands I do so. But I promise, after ACC Basketball season, no mas….) I’m not saying the fund has to grow. I am saying that we have to understand, and be clear about, the trade-offs.
On the sixth floor at Portals, where the Plan was written, there was a saying: 2 + 2 does not equal 20. That is, we could not pretend that the math added up in ways that it didn’t. We had to be transparent about our view of the trade-offs; we had to admit that we were not going to fund some programs we liked because we believed other programs served a higher priority. I am hopeful the NPRM does that but none of the Commissioners’ statements were specific as to where they would reprioritize funds. To her credit, Wireline Bureau Chief Sharon Gillett did an excellent job at the press conference detailing potential cuts, and I feel confident there are a sufficient amount of cuts in proposals in the NPRM for the math to work. Still, it is notable that no Commissioners have committed to specific cuts sufficient to transition the fund to address their aspirations.
I recognize the difficulty of articulating painful cuts. I think, however, it is a lot easier to understand how we need to re-prioritize the use of limited funds and rewrite rules to reflect new realities if the Commissioners come together to articulate where we will be in 10 years. With a common vision, the debate, about the transition path, is focused on the details of a path we agree we must walk together and success is likely. Without a common vision, the debate can go down too many paths to get resolved.
In this way, I am glad I am not the equity analyst I once was. If one were to try to decipher the actual financial impact of the Commission’s direction, one does not know from the meeting more than what one knew a year ago (though, it may be revealed more in the NPRM.) The real action, and the real drama, will begin when the Commissioners are forced to leave the comfort of their aspirations and confront the math that will force them to make trade-offs. While it wasn’t true in the first grade, in D.C., subtraction is geometrically more difficult than addition.