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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  Chairman Genachoski complains that the USF is becoming outdated and needs the changes.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: Stupidity
By mindless1 on 2/8/2011 3:51:38 PM , Rating: 2
Actually, they are talking about doing away with rural phone service which is a basic need far more important than broadband. If they are that rural do you really think there is a cell phone tower a couple of miles away? Think again.

You wrote that with internet you get telephone service but have you seen some of these rural areas? They are too impoverished to pay for the broadband, let alone broadband PLUS telephone over broadband. Plus, it is a bit backwards thinking because with telephone service you bring the potential for DSL if it is affordable, and otherwise many of these people depend on satellite internet access which needs a phone line. I have to suspect you don't know anyone or their issues living in a rural area.

You are suggesting everyone in rural america would be cut off, but above I mentioned satellite internet access, there is nowhere a person is really cut off if they want access, but if they don't even have a phone line how the heck are they even going to order the service or report downtime? I guess they have to drive to the city to get cellphone acess and sit in their car waiting on hold for a half hour to talk to someone who can't help them because the tech is saying reboot the cable modem while they have to drive back home to do it then drive back to town to tell them they did it?

You haven't thought this through very well at all.


RE: Stupidity
By AntiM on 2/8/2011 4:00:56 PM , Rating: 2
Much of this money goes straight into the Telco's pockets, without contributing to anyone's benefit but their own. If every dollar of this fund could be accounted for, I would be more inclined to support it.


RE: Stupidity
By mindless1 on 2/10/2011 5:48:30 AM , Rating: 2
For now, yes, you have to give them incentives to build and maintain infrastructure that is otherwise seemingly unprofitable.

You might say "but why should my tax dollars go towards that?" when the real issue is, their tax dollars are going towards urban projects and other pork that they don't care much about if they can't even have phone service, so fair is fair, a minor cost to keep phone service AND broadband is prudent, but not taking away the former to get the latter.

Years from now, when everything is done wirelessly, I'll have a different perspective that there is no longer the need for Ma Bell's twisted copper lines but to take away one BEFORE you have the other 100% leaves a huge gap in service.


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