GAO Report on High Cost Universal Service Program

You might find this report of interest. The short story is:

The high-cost program’s structure has resulted in the inconsistent distribution of support and availability of services across rural America. The program provides support to carriers in all states. However, small carriers receive more support than large carriers. As a result, carriers serving similar rural areas can receive different levels of support. Currently, the high-cost program provides support for the provision of basic telephone service, which is widely available and subscribed to in the nation. But, the program also indirectly supports broadband service, including high-speed Internet, in some rural areas, particularly those areas served by small carriers. The program provides support to both incumbents and competitors; as a result, it creates an incentive for competition to exist where it might not otherwise occur.

There is a clearly established purpose for the high-cost program, but FCC has not established performance goals or measures. GAO was unable to identify performance goals or measures for the program. While FCC has begun preliminary efforts to address these shortcomings, the efforts do not align with practices that GAO has identified as useful for developing successful performance goals and measures. For example, FCC has not created performance goals and measures for intermediate and multiyear periods. In the absence of performance goals and measures, the Congress and FCC are limited in their ability to make informed decisions about the future of the high-cost program.

This report is highly critical of the FCC and its management of these monies. There is no statement on the FCC Website (that I have been able to find, anyway).

Regulation of cyber cafes in India

I found this article over at BusinessWeek interesting. The article shows how regulation can stifle business activity, even if it is not price regulation.

There were some useful facts buried in the article that I'd like to pull out, though:

... India is trying to increase household PC penetration, which is currently at just 2 PCs for every 100 households, says the technology trade group NASSCOM, and broadband connectivity, an abysmal 4 million connections, vs. China's 3.2 million new connections every quarter, according to BNP Paribas. Even Vietnam, with a population of just 84 million, is signing up 120,000 new broadband users per month, according to IDC.

Mobile Internet usage

This item reports on mobile Internet use. The authors found that approximately 15% of mobile users in the US access the Internet from their phones on a regular basis, leading the 16 nations tracked by Nielsen (UK was second at 13%). Not surprisingly, these users prefer "unlimited" Internet packages (though there are often limits in reality). Yahoo Mail was the top channel accessed by the mobile web users, followed by Google search in a relatively distant second. The authors believe that the US mobile Internet market has reached critical mass, with approximately 40 million users.

US SMS prices to increase

According to this article in CNet, the cost of "a la carte" text messages is due to increase to $0.20 and bundled plans are to increase as well. This seems to apply to all of the major US carriers, though the price increase announcements have been staggered in time. Thus, according to the article, the price for an SMS message will have increased 100% since 2005.

Is it because the cost of text messages have increased? Hardly. A more reasonable conclusion is that carriers are charging more because they can. Apparently, text message demand is fairly inelastic. Is this a case of implicit collusion among the larger carriers? Possibly, though not necessarily. Even though Sprint led the price increases this time, I would imagine that one strategy they could pursue to regain market share would be to decrease the price and become the preferred carrier of the text messaging fans (demographically younger).

Payphones again

In reading the EU Household Usage report I blogged about earlier, I came across their study of payphone usage in the EU. So, to follow up on this item, consider what the EU found. The percentage of people reporting that the "sometimes" use payphones ranges from a high of 34% (Austria) to a low of 3% (Cyprus) with an EU mean of 22%. 44% of payphone users report doing so because their mobile phone is out of range or its battery has run out, while 19% report not having a mobile phone and needing to place a call while travelling and 16% report not using their mobile phone due to high international tariffs.

Very interesting. I will have to search out similar data in the US. Anecdotal evidence is that payphones are disappearing in the US, which would make it difficult to use them! Do you have any data about payphone use elsewhere in the world?

How to construct an undersea cable

In keeping with one of the themes on this blog, you might find this site interesting. You will find a lot of details on what goes into the construction of an undersea cable, along with photos and a detailed progress chart.

US Federal IPv6 conversion

Under this OMB policy, executive branch agencies in the US federal government were required to be able to pass IPv6 packets as of yesterday. According to this article in Network World, the affected agencies are on target. However, as the article points out, this does not mean that the agencies are using IPv6 in their day-to-day operations, it only means that their networks will support the new protocol. Operational transition to IPv6 remains a future goal.