Kovacs: It's time to reform universal service and intercarrier compensation

The Universal Service Fund has been in place for decades and was designed for a monopoly telephone system whose finances could be controlled by regulators. However, Anna-Maria Kovacs argues that in today's competitive marketplace, competitors are forcing prices down to cost in the areas where it is economic for them to compete, leaving the uneconomic areas to the incumbents who are forced by regulators to serve them. According to Kovacs, who is a visiting senior policy scholar at Georgetown University's Center for Business and Public Policy, today's highly competitive, innovative, global broadband ecosystem needs the flexibility to evolve naturally. She argues that support and regulation must both be targeted strategically to the increasingly rare places where they are needed, and they must be eliminated from the places where they disrupt innovation and investment. Commentary