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Article: Incentives for cost shifting and misreporting: US rural universal service subsidies, 1991-2002

TitleIncentives for cost shifting and misreporting: US rural universal service subsidies, 1991-2002
Authors
KeywordsTelecommunications
High cost subsidies
Universal service
Issue Date2011
PublisherElsevier. The Journal's web site is located at http://www.sciencedirect.com/science/journal/01676245
Citation
Information Economics and Policy, 2011, v. 23 n. 3-4, p. 287-295 How to Cite?
AbstractThe US high cost loop support (HCLS) program, formerly referred to as the Universal Service Fund (USF), has been a key component of the Federal Communications Commission’s (FCC) program to promote telephone access in rural, high cost areas. This study uses data from 1136 rural telecom firms in 50 states between 1991 and 2002 to test the impact of the HCLS subsidy system on reported costs. Our findings suggest that firms in higher reimbursement threshold tend to report higher costs to the FCC in order to qualify for higher support payments. We also find that the capping of total available subsidy funds increased the incentive to overstate or misclassify costs. Overall, our results suggest that this billion-dollar program deserves closer scrutiny than it receives at present.
Persistent Identifierhttp://hdl.handle.net/10722/192339
ISSN
2015 Impact Factor: 0.826
2015 SCImago Journal Rankings: 0.947
ISI Accession Number ID

 

DC FieldValueLanguage
dc.contributor.authorBerg, SVen_US
dc.contributor.authorJiang, Len_US
dc.contributor.authorLin, Cen_US
dc.date.accessioned2013-10-24T01:50:02Z-
dc.date.available2013-10-24T01:50:02Z-
dc.date.issued2011en_US
dc.identifier.citationInformation Economics and Policy, 2011, v. 23 n. 3-4, p. 287-295en_US
dc.identifier.issn0167-6245en_US
dc.identifier.urihttp://hdl.handle.net/10722/192339-
dc.description.abstractThe US high cost loop support (HCLS) program, formerly referred to as the Universal Service Fund (USF), has been a key component of the Federal Communications Commission’s (FCC) program to promote telephone access in rural, high cost areas. This study uses data from 1136 rural telecom firms in 50 states between 1991 and 2002 to test the impact of the HCLS subsidy system on reported costs. Our findings suggest that firms in higher reimbursement threshold tend to report higher costs to the FCC in order to qualify for higher support payments. We also find that the capping of total available subsidy funds increased the incentive to overstate or misclassify costs. Overall, our results suggest that this billion-dollar program deserves closer scrutiny than it receives at present.-
dc.languageengen_US
dc.publisherElsevier. The Journal's web site is located at http://www.sciencedirect.com/science/journal/01676245-
dc.relation.ispartofInformation Economics and Policyen_US
dc.subjectTelecommunications-
dc.subjectHigh cost subsidies-
dc.subjectUniversal service-
dc.titleIncentives for cost shifting and misreporting: US rural universal service subsidies, 1991-2002en_US
dc.typeArticleen_US
dc.identifier.doi10.1016/j.infoecopol.2011.09.001en_US
dc.identifier.scopuseid_2-s2.0-82555170318en_US
dc.identifier.volume23en_US
dc.identifier.issue3-4en_US
dc.identifier.spage287en_US
dc.identifier.epage295en_US
dc.identifier.isiWOS:000298069700008-

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