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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  Chairman Genachoski complains that the USF is becoming outdated and needs the changes.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 FITCamaro on 2/8/2011 1:46:41 PM , Rating: 3
You don't have a right to be provided with meat, or fruits, or vegetables, much less grains. Those are the luxiries of an agrarian economy.

Absolutely right.

No one has the right to anything anyone else does. You have food, water, electricity, etc because people chose to start a business to provide you with it. And if you want the fruits of their businesses, you are supposed to earn a living in order to purchase those things. You're not just given them.

And internet is even less of a necessity. No one dies from not having the internet. It is not a right. It is a luxury. If you want to live in the country, you have to accept that you're not going to have all the luxuries of someone living in a big city. And you accept that life for your children as well.

RE: another option
By silverblue on 2/8/2011 1:57:48 PM , Rating: 1
If you want to live in the city, you have to accept that you're not going to have all the luxuries of someone living in the country. Fresh air springs to mind.

I reckon, to balance this out, rural homeowners should pay less for their food as it costs less to transport it to them. People living near refineries should pay less to fill their cars. Can you imagine the outcry that would result if absolutely everything was charged this way?

Telecomms companies wouldn't fall down overnight if they provided a basic broadband service to a rural town or two.

RE: another option
By Jaybus on 2/8/2011 4:16:50 PM , Rating: 2
It has nothing to do with rights, civil or otherwise. Do the inner-city poor have a right to free money? Are subsidies for inner-city business development a necessity? Electric vehicles are completely useless in rural areas, yet they are subsidized. I the government is going to subsidize things that are only useful in the cities, then it is certainly fair to subsidize a fiber build out in rural areas.

RE: another option
By FITCamaro on 2/9/2011 10:26:19 AM , Rating: 2
Do the inner-city poor have a right to free money?


Are subsidies for inner-city business development a necessity?


Electric vehicles are completely useless in rural areas, yet they are subsidized.

And they shouldn't be.

A bunch of wrongs don't make a right.

“And I don't know why [Apple is] acting like it’s superior. I don't even get it. What are they trying to say?” -- Bill Gates on the Mac ads

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