The Computer & Communications Industry Association (CCIA) has released a paper assessing the potential costs if cloud services were required to contribute to the Universal Service Fund (USF). The USF is designed to help offset expenses associated with providing telecom services in remote and low-income areas. As traditional telecom companies seek to lessen their contribution obligations, this study evaluates the economic impact of such a change on cloud computing.
Authored by Raul Katz from Telecom Advisory Services, the study highlights potential negative effects on U.S. consumers and economic growth if USF fees are imposed on cloud computing services. Katz states that such measures would negatively impact national and state economies, as well as key sectors across the country.
An econometric analysis within the study suggests that a hypothetical 5% USF fee on cloud services could lead to a decrease in national GDP ranging from $58.88 billion to $148.18 billion, based on a 2024 GDP valued at $23.54 trillion in constant dollars.
Trevor Wagener, CCIA's Chief Economist and Director of its Research Center, commented: "Imposing USF obligations on cloud services makes no policy sense and would have severe consequences, including a 0.13% increase in consumer prices, a $7 billion reduction in capital investment by cloud service providers, and a loss of up to $148 billion in national GDP."
A live discussion with the author is scheduled for Tuesday at 10 a.m. EDT.