Audit of US "High Cost" Universal Service program

This item, the report of an audit of the US "High Cost Support" program, is a bit obscure and technical, but nonetheless points out some of the problems with centrally funded and managed universal service programs. In the executive summary, the document reports the following:

To assess compliance and risk, a stratified random sample of 390 service area providers (represented by unique Study Area Codes, or "SACs") was drawn and compliance attestation examinations/audits were completed. Audit data were provided for 384 auditees. Under IPIA standards, a program is "at risk" if the erroneous payment rate exceeds 2.5% and the amount of erroneous payments exceeds $10 million. The estimated erroneous payment rate for this HC audit cycle was 23.3% and the margin of error was 2.3% at the 90% level of confidence. The statistical estimate of erroneous HC payments during FY 2006 is $970.3 million. The rate of overpayment out of total disbursements was 22.8% with a margin of error of 2.3% at the 90% confidence level. As a consequence, statistical results from this sample indicate that the HCF USF program is "at risk" as defined by the IPIA.

Elsewhere in the report (p. 21), this was elaborated further:

The rate of improper over payment is 22.8%, and the proportion of improper over payments out of total improper payments in 98.2%.

So, basically, when there was an improper payment, it almost always was an over payment (Are you surprised?). We (users of the telephone network) paid almost 23% more than we needed to. Put another way, almost 1/4 of the collected funds (approximately $4.4 billion in FY07) were over payments!

The US Inspector General, in their report to Congress, noted

The results from Round 1 and the preliminary results from Round 2 have not lessened our concern about the possibilities for fraud, waste, and abuse in the Commission's USF programs as administered by USAC.

Thus, this is an ongoing problem that hasn't (apparently) gotten any better since the last audit!

Universal services and eligible services

The three major issues in a universal service program are determining the funding mechanisms, identifying which carriers are eligible to receive support (for centrally funded programs) and identifying the services to be included in the "universal service" definition. The US FCC has recently defined eligible services for one of its universal services programs -- the schools and libraries program (see this for the details).

TV White spaces

This issue is on the agenda today at the FCC, and it was a major topic at the recent IEEE DySPAN. The technology is intriguing, and it is hard to argue with using otherwise unused spectrum for new services. Like some others (see, for example this item over at Broadband Consensus and some of Tom Hazlett's articles, like this one over at Ars Technica) I am coming to the conclusion that we're going about this all wrong.

Given that a small percentage of households receive over the air TV, shouldn't we really be discussing doing away with that technology, and encourage broadcasters to change their business model to being pure programming providers, instead of bundling programming with delivery techniques?

The reason this is important to discuss now is that many of the white spaces devices are optimized for the particulars of the TV spectrum. If this becomes unlicensed use, then the existing channelization becomes effectively locked in because it is difficult to coordinate disparate unlicensed users to transition to a new channelization regime. Is this in the best long term interest?

Is UWB dead?

I found this item over at Ars Technica interesting. To me, this is an interesting case of the technology hype cycle ... lots of initial promise followed by a (sometimes temporary) decline until the applications are well understood. In this case, it seems that fragmentation of the sponsorship base was a key contributor to this setback.

Sprint and Cogent

If you have followed the news, you may have come across this item last Friday. A more detailed technical description is here. The world of interconnection in the Internet is cloaked in non-disclosure agreements (NDAs), so when a story like this breaks, it is useful to look at it in more detail. Not surprisingly, both Sprint and Cogent were pointing fingers (see Sprint's version here, and Cogent's here).

As of this writing, the link has been temporarily restored, but you can expect that this will make waves again. It can be quite difficult for a carrier to maintain the traffic levels needed for peering, especially with a large ISP like Sprint.