The FCC's Best USF Reform is the One that Already Happened

Federal Communications Commission Chairman Brendan Carr has called for a “top-to-bottom” review of the Universal Service Fund. His best defensive move is to preserve a rare USF success that happened 15 years ago and has quietly reduced the real burden of High Cost support. His more ambitious task is to confront the political economy that blocks structural reform and leaves rural customers dependent on permanently subsidized providers. To do that, we proposed the Voluntary IP Service Transition Auction (VISTA), a competitive auction to retire perpetual subsidies that would improve rural service and save consumers money. VISTA is modeled on the broadcast incentive auction. Small rural carriers set their own buyout prices and exit. New providers—likely including LEO satellite operators, fixed wireless providers, electric cooperatives, and cable operators serving adjacent areas—compete to take over service obligations with time-limited support. The auction closes if the combined cost of buyouts and replacement service is less than the net present value of continuing current subsidies in an area. If the auction does not meet that condition, the status quo continues, leaving the fund at no risk. But if it succeeds, the fund saves money, rural customers get a competitive path to better service, and incumbent carriers receive an orderly, compensated exit instead of an open-ended reason to block reform.