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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  Chairman Genachoski complains that the USF is becoming outdated and needs the changes.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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By supermitsuba on 2/8/2011 2:45:58 PM , Rating: -1
I would have to agree. If we didnt have the government to do these pet projects, there would not be freeways, hoover dams, panama canal and etc to benefit everyone. It sucks we have to pay for this, but in the end doesnt it make everyone's life better? i would rather pay for this than inner city welfare.

RE: I can understand the concept behind this...
By ebakke on 2/8/2011 6:36:33 PM , Rating: 2
I'm fine with governments existing, and doing things. My beef is with the Federal government doing all of them. Why do I, in MN, care about the Hoover Dam? Or roads outside of MN? Even if I travel, if the roads suck in WI, I just won't go back. I'll give you the Panama Canal, but only because other sovereign nations are involved.

By supermitsuba on 2/9/2011 11:37:08 AM , Rating: 2
that is one opinion out of millions who would disagree otherwise. There are reasons people live in those places. Who actually export stuff from their small city to the larger cities. And if broadband provides more economic opportunities to be in the sticks, then isnt that worth it enough? Gee something the government can do to spark the economy.

By wookie1 on 2/9/2011 11:07:18 AM , Rating: 1
" i would rather pay for this than inner city welfare. "

Once you allow the gov't to take your money, its not your choice anymore how it is spent. Sure, you can vote for different representatives, but it's unlikely that their spending priorities will agree with yours.

Of course, most people don't want to live in a lawless land with no governmental structure that is vulnerable to takeover from hostile forces, and we don't want people who are befelled with unfortunate occurrences to simply die of starvation. So, a government structure is needed in order for us to live in a civilized environment, but the burden and scope of government should be minimized so that each person on their own can determine what to spend their precious resources on.

"We can't expect users to use common sense. That would eliminate the need for all sorts of legislation, committees, oversight and lawyers." -- Christopher Jennings

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