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FCC Chairman Julius Genachowski  (Source: LA Times)
Funding redirection could bring high-speed access to new areas of the country

The Universal Services Fund (USF) was an initiative put in place by former U.S. President Bill Clinton's Federal Communication Commission in 1997.  The USF takes a large cut out of consumer phone bills -- approximately 15 percent out of a long-distance bill, for example -- and redirects that money to funding landline telephone service to low-income rural areas, and providing broadband at public institutions.

Over time the usefulness of landline phones has faded, but the FCC continues to pour money into that aspect of the effort.  In his bid to beef up our nation's broadband, U.S. President Barack Obama's appointed FCC Chairman, Julius Genachowski, is looking to scrap that funding and redirect it to promoting broadband in rural areas.

He proposed the change during a speech [PDF] at the Information Technology and Innovation Foundation.  He stated:

In the 21st century, high-speed Internet, not telephone, is our essential communications platform, and Americans are using wired and wireless networks to access it. But while the world has changed around it, USF -- in too many ways -- has stood still, and even moved backwards.

Currently the landline fund eats up $4.3B USD a year, while the broadband fund only gets a chunk of the remaining money.  Chairman Genachowski suggests a gradual fadeout of the telephone funding, transitioning that money to a new broadband deployment and support fund designed to push broadband into rural areas.

The new fund, formally titled the Connect America Fund, would aim to cover 24 million Americans with broadband.  Chairman Genachoski complains that the USF is becoming outdated and needs the changes.  He states, "The fund pays almost $2,000 per month -- more than $20,000 a year -- for some households to have phone service. And in many places, the existing system funds four or more phone companies to serve the same area."

The speech came with the filing of a "Notice For Proposed Rule-Making" (NFPRM).  This is the FCC's way of giving the public chance to comment.

Wireless service providers like Verizon and rural broadband providers have expressed enthusiasm about the shift.  Thus far rural landline operators have kept quiet, but they're unlikely to appreciate the measure.



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RE: another option
By DanNeely on 2/8/2011 1:17:59 PM , Rating: 2
$50/mo satellite internet (from wild blue) has a monthly download cap less half the size of a 56k line. Their $80/mo package is the only one that comes close to matching it. 17.5GB vs 18.1. Even factoring in the cost of a 2nd landline dialup is still cheaper. And at 1.5MB/sec down it's still too slow to do anything more intensive than stream audio or watch minimum quality online video.

The best I can say is that it's finally became less of a joke than cellular broadband on usage caps; even if it sucks more in every other way.


RE: another option
By mcnabney on 2/8/2011 1:52:06 PM , Rating: 2
You chose to live there, and surprise, there are tradeoffs.

Housing costs are really low.
Internet costs are higher.

You should be looking forward to Verizon's LTE service. I believe their plan is to cover massive swaths of rural America with it using the massive range that the 700mhz spectrum they bought (coast to coast). You might need to pay the extra for a top data package, but at least you will get speeds better than most cable connections and low-low latency.


RE: another option
By StevoLincolnite on 2/8/2011 8:58:37 PM , Rating: 2
Of course their are trade-offs, always is in life.

However, if Australia can provide 93% of it's population with 100mbps with capacity for even faster Fiber for a price tag of only 43 Billion dollars... With the rest filled in with high-speed Wireless and Satellite that achieves at a minimum 12mbps...

Couldn't the US do the same for the same price if not cheaper?
I mean you guys spent Trillions bailing out other companies during the financial crisis yet can't even provide decent broadband to less densely populated regions, clearly competition in the Telecommunications sector hasn't exactly been great.

And yet providing broadband to Regional areas has massive benefits to productivity and the economy.

* Like... Remote controlled tractors, saw one in action last year, amazing stuff, one farmer could control several Tractors in tandem to get the job done in less time.

* Cheap IPTV and VOIP.

* Providing broadband to regional areas also means that there needs to be more back-haul and redundancy improving reliability in city areas if a cable goes down.

* E-Health.

* Suddenly a small businesses customer base is no longer hampered by geography.


RE: another option
By Motoman on 2/9/2011 10:48:17 AM , Rating: 2
The population of Australia is ~22 million. Which is roughly 7% of the population of the USA.

Australia is a vast country in landmass, but there's no valid comparison to make when looking and the sheer numbers of Australian citizens in rural areas vs. the number of Americans in rural areas.


RE: another option
By silverblue on 2/11/2011 4:20:21 AM , Rating: 2
Most Australians live on the coast as the vast majority of their continent is semi-arid or desert. The same, of course cannot be said for the USA. Personally, I'll never get over why so many Americans live in areas prone to violent weather, but that's their choice really.

Had Australia more habitable land, I think it's safe to assume the population would be far higher than it is now.


RE: another option
By wookie1 on 2/9/2011 12:22:59 PM , Rating: 2
"Couldn't the US do the same for the same price if not cheaper?"

I think this is the wrong question. Why should we divert our scarce resources to this cause? Why should we forcibly take money out of other people's pockets to pay for this? We're out of money. We owe $14T to our creditors and run a structural deficit of $1.5T per year, not including off-the-books costs like medicare, social security, and defined-benefit pensions for government employees.

The question to ask for any of these broadband-for-all programs and their ilk are can't we do without them, rather than can we afford the extra monthly payment?


RE: another option
By mindless1 on 2/14/2011 6:36:53 AM , Rating: 2
The answer is that the government is going to take the money anyway, so it boils down to a choice of whether to waste it doing stupid things like burying CO2, or doing smart things like increasing value-added infrastructure.


"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA














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