“Take the Money and Run” is only a song
In our last WATC edition, we acknowledged that the FCC is poised to invest an additional $540,000,000 over the next decade in federal universal service funding for both ACAM and legacy carriers; and noted that the administration promises yet to be defined infrastructure funding, with rumors at that time of some form of state block grants being used to distribute a portion of the funding. We provide a brief update on both issues.
FCC Order Increasing ACAM and Legacy funding levels
I believe we are less than 30 days away from seeing the FCC Order approved, and we will offer some more discrete observations once we see the text of that Order.
While some have been frustrated with the debate on allowed expense items that has delayed the release of the Order, that is chasing nickels and dimes when compared to the over $540,000,000 of additional federal USF that will be infused into the FUSF system, directly benefitting your customers. If one must have something to worry about, concern yourself with whether you will be providing adequate broadband speeds to your customers in 2026. Now that is something worthy of worry!
With the industry trade press doing a nice job covering the proposed dollar levels at a macro level, we will focus today on the mechanism for distribution rumors. In our last WATC, we touched lightly on state block grant funding as a mechanism. Just this week, I have heard that some of the federal agencies, both in our sector as well as other infrastructure sectors, may believe that they are better equipped than any of the states to make the infrastructure funding decisions.
Please recognize that the strategies for winning money under those two distribution approaches differ, and in some cases we do not provide the best photo opportunity for a politician when compared to a new bridge or road. If we end up in a state block grant mode, we will need to creatively develop the right “photo opportunity” for the decision makers.
This latest journey to more funding for existing programs and the opportunity for infrastructure funding has demonstrated an existing reality. Three important data points must be satisfied in the current WDC environment in order for additional federal funding to flow:
1) What is the total cost of the revised or new federal program?
2) What is the impact on existing programs and how may they be leveraged effectively?
3) And on an individual company level, why should you be a recipient?
There are industry groups from A to Z asking for more federal money in Washington, D.C. on a daily basis. When our industry efforts ignore any of the above three steps, especially the third one, we will fail and in fact may do more harm than good. We are well past 1976, when the Steve Miller band sang the hit song “Take the Money and Run.” In 2018, money comes with strings attached, in this case with performance obligations and penalties for non-compliance.
As we proceed with our WATC series, please contact Jeff Smith on 503.612.4409, if you have any questions.