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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  Chairman Genachoski complains that the USF is becoming outdated and needs the changes.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 wookie1 on 2/9/2011 11:00:16 AM , Rating: 2
I'm not talking about subsistence farmers, either. I don't think that the traditional family farmer pulls in a big truckload of cash, though.

I probably couldn't run a small business without a telephone, or electricity, or water, so I would definitely plan on budgeting for those necessary inputs. Hey, it's cool if I can get the taxpaying public to cover my operational costs, but should I reasonably expect that?

RE: another option
By spamreader1 on 2/10/2011 2:11:44 PM , Rating: 2
Most family farmers, even larger ones, don't get to set thier own prices on most products (milk and eggs, largest example). Everythings regulated at state and federal levels. Where you can budget the necessary inputs, farmers have to sacrifice as it is for telco service, many areas are cooperatives that aren't even being fed these funds mentioned in the article, and are paid by the members of the cooperatives. (rural electric is the same in most cases, especially since electric deregulation, I personally pay 33 cents per kw/h now...)

I live on a hobby farm, meaning I don't expect to make a profit, and as such make my money in the IT sector. I use cdma broadband (att aircard) due to the 1500ms lag time of satalite is prohibitive to do any remote access (300ms is doable). There are options available in may locations that are covered by wireless carriers as well as dish for those who don't have access to wireless carrier networks. In areas that have wireless coverage for cell phones I think it would be great to stop supporting the rural telephone network, most of us can't justify the $80+/mo to have a land line anyway, when cell phones are 1/2 the cost. I'd be really interested to see where these funds go, I've lived in rural areas of Texas for most of my life, and to my knownledge the only subsidy employed for telco was the initial investment made when they inacted the rural electric stuff anyway.

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