The IP interconnection transition generates unavoidable costs for ICC-dependent rural carriers, and deferring those costs to “future proceedings” predictably leads to pressure for permanent new USF support. We propose a Voluntary IP Service Transition Auction (VISTA) that converts those implicit future liabilities into explicit, time-limited transition payments. Small incumbent carriers could voluntarily bid to exit federal ETC status and associated legacy obligations, while other providers bid to assume restructured service obligations for consolidated territories. The auction would close only where the combined cost of exit payments and time-limited support is lower than the net present value of continuing high-cost subsidies. Modeled on the broadcast incentive auction, VISTA reveals market prices for exit and entry, enables consolidation where it is efficient, incorporates fixed wireless and LEO satellite as credible competitors in high-cost areas, and allows the IP transition to proceed without expanding the long-run size or scope of the Universal Service Fund.
Gregory Rosston is Director of the Public Policy Program at Stanford University and Senior Fellow at the Stanford Institute for Economic Policy Research. He is also a Lecturer in Economics and Public Policy at Stanford University where he teaches courses on competition policy and strategy, intellectual property, and writing and rhetoric. Rosston served as Deputy Chief Economist at the Federal Communications Commission working on the implementation of the Telecommunications Act of 1996 and he helped to design and implement the first ever spectrum auctions in the United States. He co-chaired the Economy, Globalization and Trade committee for the Obama campaign and was a member of the Obama transition team. He has served as a consultant to various organizations including the World Bank and the FCC, and as a board member and advisor to high technology, financial, and startup companies. Rosston received his Ph.D. in Economics from Stanford University specializing in the fields of Industrial Organization and Public Finance and his A.B. with Honors in Economics from University of California at Berkeley.
Scott Wallsten is President and Senior Fellow at the Technology Policy Institute and also a senior fellow at the Georgetown Center for Business and Public Policy. He is an economist with expertise in industrial organization and public policy, and his research focuses on competition, regulation, telecommunications, the economics of digitization, and technology policy. He was the economics director for the FCC's National Broadband Plan and has been a lecturer in Stanford University’s public policy program, director of communications policy studies and senior fellow at the Progress & Freedom Foundation, a senior fellow at the AEI – Brookings Joint Center for Regulatory Studies and a resident scholar at the American Enterprise Institute, an economist at The World Bank, a scholar at the Stanford Institute for Economic Policy Research, and a staff economist at the U.S. President’s Council of Economic Advisers. He holds a PhD in economics from Stanford University.
