FCC moves to least-cost-subsidy auctions for universal service

Posted on October 7, 2011  /  1 Comments

Two years after our research was cited in a presentation by Scott Wallsten to Congress to support his argument that the US should adopt least-cost-subsidy auctions and I condemned the inefficient ways of US universal service fund disbursements at an event attended by senior FCC staff, the change is done: The US will use auctions.

Can we claim direct causal responsibility? No. But did we do what catalysts do? Yes. We’re happy the US will use less inefficient methods to disburse universal service funds (still too much as a percentage).

1 Comment

  1. Visoot Phongsathorn

    I have argued before that bidding out subsidy does not make subsidy smart. Subsidy becomes smart only when it produces sustainable outcome, i.e. outcome outliving the subsidy payment. LIRNEasia has done quite a bit of research on this. At least, I remember the Nepal one. I hope the FCC pick up from our research more than just the least-cost bidding bit. The bit on getting the market conditions right is actually much more important.