Should you be paying for cell phone service in Adak Alaska?

During the Dog and Pony show put on for C-SPAN with the 5 members of the FCC Board, Senator Mark Begich (D) from Alaska used his 5 minutes of fame to make a pitch for the FCC to bend the rules to keep the phone company in Adak Alaska connected firmly to the Federal Sow’s Teat.  Any American with a phone pays into a thing called the “Universal Service Fund”, an idea from the FDR era that it is a good thing if city people help pay the costs of running utilities out to the farmers in rural America, since having a cheap supply of good food is a good thing.

First the Geography:

Adak sits at the west end of the Aleutian island chain.  It’s the last permanently settled island before you are in Russia.  It is 650 miles out in the ocean from the nearest part of the Alaska mainland and much further from any road.  People in Alaska use airplanes for routine travel, not cars  (Senator Ted Stevens was killed in a small plane crash a few years ago – Senator Begich is the man who replaced Stevens, who championed the “Bridge to Nowhere” – pork is a bipartisan thing)

Adak sits on top of where massive plates in the earth’s crust meet – just about every day, Adak has at least one 4.0+ earthquake.  The main reason Adak exists is it was the location of a US Air Base useful in World War II and durintg the Cold War – it is now a civilian airport.

The population of Adak is something around 300.  It constantly rains there – in the winter, it gets blasted with 120 mph winds.  Any building not actively maintained quickly blows away.  The main economic activity is a refueling station for fishing boats that work out of Seattle.

So, the FCC discovered widespread fraud and abuse of the Universal Service Fund, which was being milked by phone companies that didn’t qualify or didn’t need a subsidy or were providing multiple phones to the same person.   The cell phone company in Adak apparently borrowed money from the US Dept of Agriculture’s Rural Utility Service (RUS) loan fund to build the land lines and the wireless phone service.  The entire town of Adak is only a few blocks in size.

So the FCC now requires a study to prove that the phone company deserves to suckle at the government teat.   The phone company of Adak spent $700,000 so far on producing that study.   If they can’t keep getting free money, the 200 or so customers won’t be able to pay the loan back to the fund intended to help farmers in Nebraska have a phone so they can talk to their grain elevator during havesting.   If the phone company defaults on the loan, the USDA will get very very mad!

The USF is capped to a limit of ONLY $250 per phone line per month!

https://prodnet.www.neca.org/publicationsdocs/wwpdf/4912windycity.pdf

Last December, the cell phone company got $134,344 for the phones (that’s about $500 per month for every person in Adak), and it was cut back in January to only $22,356, an 84% cut!   Oh, the humanity.    As a result, the city lost internet access and long distance service to the mainland (unless of course you have an “expensive” satellite phone – an Iridium phone costs about $40 a month and $1 per minute to use).

During the little speech, Senator Begich made a point that all of the members of the FCC in front of him have alreadybeen to Adak to personally see the awful situation there.  (more good money chasing bad)

Probably the subtext of a lot of this has to do with mineral rights in the Bering Sea, and maintaining a claim on where the International boundary is between the US and Russia.   If Adak was abandoned and blew away next winter, that would weaken the U.S. claims to mineral rights (like oil) that might lie untapped under the water.

So do you think this is what Thomas Jefferson and James Madison had in mind?