Universal Service Fund (USF) reform can be complex, arcane and downright mind numbing. But the subject is vitally important. On October 27th, the FCC will cast a historic vote. Getting it right will advance our communication goals for decades. Getting it wrong will retard competition and innovation.

Despite the complexity of detail, there is one overarching principle that must guide the FCC in its final hours and will be the standard by which the outcome is judged. Simply put, will the Order be focused on the best interests of the American people, or will it be designed to protect incumbent telco business models and stock prices?

There is no greater mechanism for maximizing consumer welfare than competition.

The last century, policymakers accepted that the communication market was best served by government-supported monopoly. The term “universal service” was actually coined by Theodore Vail in 1907 as a basis for justifying the efficiencies of a monopoly. The government accepted that compact at a time when only 35 percent of homes had phone service and abided by it for nearly 80 years until divestiture, though not without regret.

Today, 98 percent of homes have telephone service and in the 1996 Act we came to recognize that competition is the key to bringing consumers more choice, promoting efficiency, driving technological innovation and encouraging fresh investment. Competition is not a “risky experiment.” It is more proven than monopoly business models or government computer models in bringing the highest value to consumers.

The cable industry has built broadband to 93 percent of America, without government subsidies or benefits. We want universal service reform that will give us a fair chance to compete for the right to deploy broadband in those remaining areas where it is admittedly economically difficult to serve.

Considering the overall objective of delivering broadband to all Americans, it is astonishing that the FCC is considering a regime in which the largest incumbent telcos would be granted the inherent right to all of the available money in certain areas, before any other industry (which are equally able and committed to serve) has a chance to compete. Cable is the leading broadband provider in the nation, but it will have to stand in line behind wireline telephone companies. Wireless is one of the most exciting ways for accessing the Internet (homage to Steve Jobs) yet they stand in the consolation line as well. And what is the harm of allowing competition?

If cable fails to show up to serve, telcos get the money. If cable competes for the subsidy, but is not the best provider, it will lose and the telco gets the money. If cable competes and wins, the consumer is the winner and will get broadband service for the first time from the most efficient and effective provider.

At bottom, behind the rhetoric, the telcos want the government to ensure that they do not have to compete. No need to be efficient. No need to have the best offering. No need to go the extra mile for consumers. Show up and you get to claim the pot.

We also hear the tin siren call that you have to embrace monopoly in order to get broadband deployed faster. Theodore Vail would smile ear-to-ear listening to his old rationale for government-sanctioned monopoly getting new life. But sacrificing important competitive principles for expediency is backward and wrong. Moreover, the promise of quickness is wildly exaggerated. The FCC will have to build a model and design a bidding process no matter what. Once those efforts have been completed, a competitively neutral distribution mechanism (such as the county-wide bidding approach that NCTA proposed last week), takes no more time than a monopoly approach.

This stuff is hard and complex. It has taken over a decade to get this reform effort on a path to passage; it will likely be another decade before it is fundamentally changed again. Any reform that is not (1) fiscally responsible; (2) competition friendly; and (3) technically neutral will be a travesty.

It will be an expensive government program that does not drive America toward the future, but instead just pays expensive homage to our past—paid for by cash-strapped consumers.

As the nation this weekend reflects on the events and aftermath of September 11, 2001, NCTA President & CEO Michael Powell – who had been appointed Chairman of the Federal Communications Commission by President George W. Bush in January of 2001 – shares his reflection of that day:

I was a new FCC Chairman and had just settled down to breakfast with Rupert Murdoch when my phone rang.  My chief of staff informed me a plane had hit the World Trade Center.

I was bemused at first, imagining a wayward Piper Cub.  My mood turned grim and fearful as she conveyed the details – big planes, two of them, massive explosions.  We were under attack.

I rushed back to the FCC.  I was greeted at the door by staff and they started breathlessly briefing me about New York City.

My attention swiveled to the southern sky where a huge dark plume of smoke was rising. I exclaimed, “Forget New York for a minute. What is that?” pointing to the ominous cloud.  We rushed upstairs to the windows and could see the Pentagon aflame.

We plugged into the government emergency briefing and began hearing the horrific and unimaginable story. Not an accident. Not an incident. Not an isolated attack. Fighter jets in the air. The fleet headed to sea. We were at war in the midst of a real battle.

Then I shuddered when we were told all planes had been grounded, but one was not responding and appeared headed to DC.  I ordered everyone home immediately over the objection of OPM [US Office of Personnel Management], who had yet to authorize release of workers.  I believed only two things were possible: either a plane-bomb was about to hit our city, or there was going to be a dogfight over our heads.

It turned out there was a third possibility that came actually came to pass – heroic passengers selflessly attacking the attackers, bringing the plane down and saving countless lives.  ”Let’s Roll.”

I never loved my country more than in these moments, but I knew she would never be the same – her youthful innocence forever over. I only prayed our optimism and resilience would mature rapidly into steely resolve.

It did and I remain proud to be an American.

NCTA President & CEO Kyle McSlarrow is the featured guest on C-SPAN’s The Communicators program this week. The video is now available online, and will air on Saturday at 6:30pm on C-SPAN.

For more thoughts on the interview, check out John Eggerton’s preview of the show in Broadcasting & Cable.

UPDATE: Just a reminders that The Communicators also airs Monday on C-SPAN2 at 8 a.m. and 8 p.m. ET. You can also subscribe to the show’s podcast. If you’re interested in seeing the comments about Google, they appear about the 17:45 mark.

NCTA’s annual conference The Cable Show is coming up soon. The 58th Annual Convention and International Exposition will be held in Washington, DC in less than seven weeks; you can follow details about the event on the Show’s blog or by following CableShow on Twitter.

Today, my colleague Joy Sims has prepared a report on a pretty cool exhibit we’ll be having at The Cable Show: Broadband Nation.

Talking about the benefits of broadband and how we can expand the number of Americans with high-speed connections is all the rage here in Washington, especially as Congress deliberates over an economic stimulus bill that may include billions for broadband.

Those of us in Cable Land think the attention on broadband is long overdue, and as the nation’s largest provider of broadband service with a near national and scalable network that is delivering market-leading speeds, we are excited to jump aboard the broadband train.

So, what are the many ways which consumers can benefit from broadband?  You can see for yourself at a 22,000 square-foot Broadband Nation exhibit that will be the centerpiece of NCTA’s annual Cable Show being held April 1 -3 at the Washington, D.C. Convention Center.

This large-scale broadband exhibit will demonstrate how consumers can use broadband in their homes, communities and beyond.  Details about the exhibit were announced last week, and we’ll be sharing more information in the coming weeks.

Broadband Nation is being designed to replicate real communities anywhere in America and will include urban, suburban and rural settings.  These communities will be complete with an entertainment center, school, medical clinic and small business.  To the left, you can see a small-scale mockup of what Broadband Nation will look like on the show floor.

Visitors to the exhibit will have hands-on access to see how the latest – and future – broadband technology can be integrated into a suburban home or an urban loft; a school; a small business; and a health clinic.  A cable company’s office – also located within the exhibit – will help guide the operations within the communities.

Technology to be on display will include:

• Next generation, ultra fast high-speed Internet (aka DOCSIS 3.0) demo provided by Comcast
• RF Over Glass (RFOG) fiber-to-the-home
• WiMAX Mobile Broadband
• tru2way TVs
• Broadband-based, whole-home automation and entertainment solutions
• Comcast’s HITS AxIS service which Multichannel wrote about following its introduction last May
• Specialized medical technology for health clinics, such as telehealth applications
• Enhanced RV-based applications for home
• 3-D TV

Want to register or learn more about The Cable Show?  Check out www.thecableshow.com where the lineup of speakers, sessions and activities is available and constantly being updated.

In my first post, I thought I’d give you a little background on myself.

I have worked in the cable industry for 16 years. I’ve always been around the film and television business; my father worked for a broadcast network for 20 years. I’m a voracious TV viewer and always have been. Still, all of my time in cable continues to be a learning experience.

Cable is heading into its 60th year in 2008, but it’s a dramatically different business than it was in the late Forties. In the early Seventies, I had cable as a kid because we lived north of L.A. and television signals were blocked by mountains; without cable, you couldn’t see TV at all. By high school, there were new channels like A&E and Superstation TBS. I vividly remember a show called “Pop Clips” on Nickelodeon, which was the pilot for MTV.

By the time I entered the cable business in the early Nineties, the technology was beginning to undergo some dramatic changes. Cable modems showed up in the market in 1994. I was at the panel where John Malone (then of TCI) made his famous pronouncement about a new world with “500 channels,” a remark misunderstood at the time, since he was talking more about increased bandwidth through digital compression than he was speaking of programming networks. Since then, digital cable, video-on-demand, telephony — all these services have changed the cable industry.

Now we’re in 2008, and NCTA has launched this blog in order to discuss these issues online. At CableTechTalk, we will be examining many of the current trends in broadband and telecommunications. As a consumer myself, I’m just as anxious as you may be for things to keep changing and getting better all the time. That’s why we welcome your input here as well, since we all have a vested interest in the technology that delivers us out entertainment and information to thrive.

Let the dialogue begin!