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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  Chairman Genachoski complains that the USF is becoming outdated and needs the changes.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 tastyratz on 2/8/2011 2:24:32 PM , Rating: 1
And what about paving roads in rural areas? Should those perhaps stop receiving states subsidies? How dare they connect larger cities! Its only convenience, they clearly have the option to walk!

Holds Just as much water. We are not putting the "every American's right to porn" act in the forefront, it's basic commercialization and communication rights in the 21st century.
Just as you pay taxes to help keep roads other than the ones you drive on paved, you put a 15% portion of (what may have gotten you that phone line in the first place) your phone bill towards infrastructure development. Hell, this isn't even an income tax! It is a tax that you elect to pay with your so called "luxury". If you so despise to pay it, perhaps you should choose to boycott by canceling your internet?

The time for rural connectivity now is fairly critical if we want to keep our jobs in the usa... we have to be able to market them to the residents.

Also as to the basis of your entire argument about "me" trying to get you to pay for "my" internet... if you read my statement you would realize I explicitly stated I am not impacted by this. That is right - I am a city boy but I support developing our country. I might even like those rural areas to have other luxuries like public education and emergency services!

RE: another option
By FITCamaro on 2/8/2011 2:41:35 PM , Rating: 1
Most roads through rural areas are spawned off the interstate system. The interstates were formed as part of the national defense during World War 2.

If a state wants to subsidize roads in a rural area, that's the states choice. The federal government doesn't have that power. Or it shouldn't. The same should be for telephones, broadband, etc. States have any power not explicitly given to the federal government. The federal government only has the powers granted to it by the constitution.

Regardless of what liberal Democrats want people to believe, a lack of commerce does not fall under the commerce clause. The commerce clause was put in the constitution to prevent states for setting up barriers that would prevent commerce between the states. Not to give the federal government the power to regulate all commerce.

RE: another option
By smackababy on 2/8/2011 3:19:04 PM , Rating: 2
Sadly, cities cannot subsidize internet for its citizens. A city tired this and was sued by the cable companies because they were granted a monopoly for that area.

RE: another option
By FITCamaro on 2/8/2011 6:21:45 PM , Rating: 1
Another issue caused by the federal government.

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