Hazlett Report Credited in Article on Effects of FCC Cap on Telecom Subsidies

Professor Thomas Hazlett's research showing some rural telephone companies were receiving very large subsidies was cited in a Honolulu Star-Advertiser article about the efforts of a Honolulu-based phone company's scramble to cut costs and find new sources of revenue subsequent to the FCC's decision to cap the amount of USF subsidies telecommunications companies can claim for serving "high cost" areas.   

"Even accounting for the lower subsidies put in place under the USF reforms, the FCC could provide service to rural areas at a fraction of the cost using cellular technology, according to George Mason University professor Thomas Hazlett, a former chief economist at the FCC," wrote the article's author.

The article continued,"FCC data show that 99.8 percent of the U.S. population lives in the coverage area of a mobile telephone operator, Hazlett wrote in report released this month titled 'Unrepentant Policy Failure: Universal Services Subsidies in Voice and Broadband.' 'A consensus among expert economists is that instead of improving network coverage or benefiting telecommunications users,' Hazlett wrote, 'the subsidies have been wasted, padding the costs of rural phone companies and delivering only pennies on the dollar, if that, in social value.'" 

Subsidy restrictions force Sandwich Isles to retrench, The Honolulu Star-Advertiser, July 28, 2013. By Alan Yonan Jr. 

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