Three House Commerce Committee members ’strongly oppose’ using re...
Three House Commerce Committee members “strongly oppose” using reverse auctions to set high-cost universal service subsidies, they told Chmn. Martin. “Using reverse auctions to disburse universal service funds would be a mistake that threatens to cripple the availability of…
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reliable telecommunications services to rural Americans,” said Reps. Boucher (D-Va.), Terry (R-Neb.) and Pickering (R-Miss.). In an April 10 letter, they gave 3 reasons for their fears about the impact on rural areas: (1) It’s doubtful that reverse auctions can guarantee “quality service at reasonable and affordable rates,” as required by the Communications Act, they said: “The mere fact that the service provision would go to the lowest bidder makes the reverse auction concept suspect in its ability to fulfill the mandate of Congress.” (2) “Least cost funding incents paring service quality levels to absolute minimums,” they said. If rural service ends up worse than that in urban areas, the FCC can’t meet its Communications Act mandate of assuring rural services are “comparable” to urban. (3) Reverse auctions might not meet a Communications Act requirement that universal service support be “specific, predictable and sufficient,” they said: “A reverse auction raises questions about predictability because support to eligible providers would be temporary. It implicates sufficiency because a reverse auction would create incentives to underbid.”