FCC Approves Obama Administration's Government-Run Rural Broadband Plan
October 28, 2011 3:12 PM
comment(s) - last by
Land line subsidies to die completely in 2020, broadband fee and subsidy system kicks in next year
The federal government's effort to expand communications to impoverished and rural Americans is
shifting gears from phone lines to broadband
U.S. Federal Communications Commission
a new plan and a new set of rules that will revamp the way taxes are used to improve communications in the U.S.
I. "Bye Bye" Land Line, "Hello" Broadband
The new rules revamp the Universal Service Fund (USF), a government fund financed by a 10 percent government fee (tax) on phone lines (cell phones, land lines) in the U.S. The USF was first created as part of a broad package of telephone and internet reforms passed in the
Telecommunications Act of 1996
, which was signed into law by President Bill Clinton (D).
Under the Obama adminstration's plan, the estimated $8B USD the USF pulls in annually from U.S. taxpayers is being redirected. The plan, approved by the FCC this week will
eventually throw out the old subsidies
on poor, rural Americans' phone service.
In its place will be two plans, aimed at bringing more modern communications technologies to these folks. The first is the "Connect America Fund", which will direct $4.5B USD annually to funding mobile phone and broadband service to rural areas. The services will only cover areas that private businesses refuse to cover.
Much of America [orange] is not covered by what the FCC defines as high-speed internet (3 Mbps down; 768 kbps up). [Source: FCC]
A second fund, "The Mobility Fund", will get $500M USD. This fund will focus its efforts on
spreading wireless internet
The plan was approved by a unanimous 4-0 vote, with FCC Chairman Julius Genachowski calling the plan "a momentous step in our efforts to harness the benefits of broadband for every American."
The plan is expected to provide service 7 million Americans over the next six years, and create 500,000 high-tech jobs, keeping America viable in a "fiercely competitive" global economy.
II. Some Warn Broadband Bills Will Go Up, FCC Says They Won't
The fly in the ointment may be higher bills. Until 2017, the fees supporting USF will still be in effect, and the government will be funding the CAF and Mobility Fund from additional fees on broadband.
Public Knowledge, an advocacy group,
, "[W]e share the concerns of other consumer organizations that the Commission's actions will lead to higher prices at a time when the average American is watching every penny."
Generally, while mobile service providers are pleased with the plan (which may give them funding for network expansion),
broadband providers are irrate
But the FCC's three Democratic comissioners, and the loan Republican commissioner were unilateral in insisting consumer bills will not, on average, increase. They say that their plan counteracts the extra broadband fee by eliminate some of the network of confusing subsidies and kickbacks on broadband and phone service. As a result, these cuts will create enough of a price cut to absorb the new fee, they say.
Comments Republican Commissioner Robert McDowell, who endorsed the plan, "For the vast majority of consumers, rates should decline or stay the same."
Robert McDowell, the FCC's sole Republican commissioner spoke for some in his party in supporting the plan. [Source: C-Span]
Democratic FCC Chairman Genachowski adds, "I don't expect that overall consumer rates will go up as a result of this."
The plan will go into effect this year, with funds being put to use between 2012 and 2016. Between 2017 and 2020, the USF will be discontinued and rural areas will stop receiving subsidies to keep their phone land lines alive.
The government playing utility is a role that troubles some, but it's an issue complicated by the fact that there's almost 10 million Americans living in regions that the private sector refuses to cover. Thus, there should be plenty of lively debate on this topic.
This article is over a month old, voting and posting comments is disabled
10/28/2011 4:03:15 PM
I'm generally conservative, and usually dislike or even hate government regulation, but if these guys can get Comcast under control, get them to fix their equipment and get decent customer service instead of the bunch of lazy bums they have now, I'm all for this.
On the other hand, if they don't actually bother to do anything about problems in the system, like so many other things Obama's policies have left, then I object to this.
More regulation with no teeth, and avoiding execution of the existing laws, is not tolerable.
10/28/2011 4:46:04 PM
You honestly believe that it's a good thing for a government to dictate business terms to companies? You need competition, your monopoly is due to local and federal regulations enabling Comcast to not care. If they would let anyone come in, just watch Comcast get there act together or close shop.
Sure, dictate construction times, street repair quality etc. But stop the monopolies.
10/28/2011 5:09:46 PM
In general, you need government to tell the companies what they can and what they cannot do. It started with Hammurabi's code, thousands of years ago :) We need UCC - Uniform Commercial Code - so everybody is on the same page on how to do commercial transactions.
Re Comcast, yep, they are a problem, and it is funny to see how they drop their prices once there is a second provider in the area :) They managed to fight off competition for a long time, but with DSL/UVerse and Satellite available in more places, things are improving....
10/30/2011 8:24:55 AM
Well, the (state) government is enforcing Comcast's monopoly around here. They should keep Comcast in line. Since the state government isn't doing so, maybe the Federal government would. I'm not exactly holding my breath for this, but I'm still hoping somebody will smack Comcast on the back of their collective heads and get them to straighten out.
"If you can find a PS3 anywhere in North America that's been on shelves for more than five minutes, I'll give you 1,200 bucks for it." -- SCEA President Jack Tretton
Obama Reveals National Wi-Fi Plans, Claims it Will Cut Deficit by $10B USD
February 10, 2011, 4:06 PM
FCC Moves to Kill Support for Landlines in Rural Areas, Beef up Broadband
February 8, 2011, 11:04 AM
Broadband Providers Complain as March 17 FCC Broadband Plan Unveiling Nears
February 23, 2010, 12:15 PM
FCC Eyes Reallocation of Universal Service Fund for Broadband
December 2, 2009, 10:13 AM
Inspiron Laptops & 2-in-1 PCs
September 25, 2016, 9:00 AM
The Samsung Galaxy S7
September 14, 2016, 6:00 AM
Apple Watch 2 – Coming September 7th
September 3, 2016, 6:30 AM
Apple says “See you on the 7th.”
September 1, 2016, 6:30 AM
Apple sued because of iPhone 6 Touch Disease
August 31, 2016, 7:00 AM
Get Ready to wait in line – iPhone 7 due September.
August 18, 2016, 7:15 AM
Most Popular Articles
5 Cases for iPhone 7 and 7 iPhone Plus
September 18, 2016, 10:08 AM
Laptop or Tablet - Which Do You Prefer?
September 20, 2016, 6:32 AM
Update: Samsung Exchange Program Now in Progress
September 20, 2016, 5:30 AM
Smartphone Screen Protectors – What To Look For
September 21, 2016, 9:33 AM
Walmart may get "Robot Shopping Carts?"
September 17, 2016, 6:01 AM
Latest Blog Posts
Who is in Risk of Getting Oral Cancer?
Sep 23, 2016, 6:02 AM
France Bans Plastic Eating Utensils in Restaurants
Sep 18, 2016, 10:49 AM
Progress Against Acute Myeloid Leukemia
Sep 17, 2016, 5:30 AM
Apple Watch Series 2 - Number 1 in the Customer Satisfaction.
Sep 7, 2016, 6:19 PM
First Self-Driving Car debut on the streets of Singapore
Aug 28, 2016, 4:10 PM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information