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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  Chairman Genachoski complains that the USF is becoming outdated and needs the changes.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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Getting rid of landlines
By guzzisport on 2/9/2011 12:11:04 AM , Rating: 2
I live in the Digital Desert of rural America. I do have Hughesnet but it could only be laughingly called broadband. If the weather is bad, it is useless. The landline I have is the only fault free contact with medical and fire services. Calls to AT&T, Cox or any of the normal urban broadband carriers have made it abundantly clear that they will never expand services into the rural areas. I can't blame them, it doesn't make sense economically. Government has repeatedly demonstrated its inability to expand these kinds of technologies at affordable prices to rural areas so for the time being, it would better to at least let the landlines exist until such time as internet through powerline technology matures or some other technology becomes viable. That won't come soon either. Great Britain is having fairly good success with wideband and ultra-wideband deployment but lets face it, no European country encompasses the area that the USA does. Let sleeping dogs lie and leave my landline alone.




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