New studies question benefits of USF subsidies to wireless carriers

Posted on June 14, 2007  /  0 Comments

Two new studies call into question whether the USA’s universal service subsidies received by cell phone companies generate benefits for consumers. Specifically, the studies show that subsidized cell phone companies actually provide less coverage than unsubsidized companies serving the same areas, and that there is no basis for wireless carriers’ claims that they use the subsidies to build out coverage to areas that otherwise would not be served.

In the approximately 800 study areas where wireless carriers receive USF subsidies, unsubsidized carriers provide substantially more coverage. Unsubsidized carriers cover 97% of the population in these areas, while subsidized carriers cover only 70%. Read more.

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