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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.  The U.S. Federal Communications Commission have approved 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.

American coverage
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, warns, "[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
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.

Sources: FCC, Public Knowledge

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RE: Really?
By FITCamaro on 10/30/2011 10:58:15 PM , Rating: -1
And they get at least some small amount at the very least from the federal government,

State and local funding trumps federal spending by a large margin.

Let's run the instutations that teach and educate our future as a for-profit business. THAT ALWAYS works well.

Private != for profit you dumbass. I went to a private Catholic school all the way through 12th grade that was not run for profit. Yes they should be privatized. So schools actually have to care about what is spent. You did nothing to address the fact that public schools spend more money per student than private schools. Which according to your idea that all private schools are run as for-profit businesses doesn't make sense. Actually it would mean they could spend even less.

I don't know where you live, but here, we LITERALLY have a school we LITERALLY pay a small fee into the school.

Yes people who own homes see it. But people who don't, don't. And typically the children of those who don't own homes do the worst in school. I'm talking $20/month. Reduce the property taxes for everyone to pay it. Get the local landowners(apartment complexes) on board to cut peoples rent similarly so it doesn't affect people's bills. People care a lot more about something that they actually pay money to visibly every month than a hidden fee in taxes that not everyone pays directly.

Rather then paying a shitload for a private school that has to answer to no one (except for profit hungry investers) and you (assuming you're a non-share holder) has NO say or idea what goes on under several layers of privacy. Perfect.

No the state can directly pay these schools instead of to public schools. The state can rate schools and those who do poorly will lose state funding. The difference is private schools won't have to answer to public sector unions which do nothing but drive up costs and create an atmosphere where once a teacher gets tenure, they almost can't be fired. Many places once a teacher has been around for 2-3 years, they're immune from layoffs through seniority even if they're a crappy teacher.

I think you're right. I harken back to the days of kids working in mines and when the populace was so damn ignorant, it was something south of tragic.

Well good to see you're open to debate and reason. Idiot.

Got to love your libertarian utopia.

As opposed to your world of flowers and sunshine liberal shit?
And I am not a libertarian. Conservatives share some ideals with libertarians, but not all.

Every state that has made school vouchers available for parents who don't want to put their kids in shitty public schools, the kids almost always do better. This would merely make the system the rule rather than the system. Parents could pick from all the schools and choose one. The state would provide funding for the child to that school. If a school does poorly, it loses its ability to get state funding. Parents would be more involved because if they liked the school, they wouldn't want it to lose funding so they'll care more about the quality of the education there. And ultimately, attentive PARENTS, not teachers, determine how much a kid is going to learn. You can send a kid to the best school in the country. But if his parents don't make him do the work, they're going to fail.

"Nowadays you can buy a CPU cheaper than the CPU fan." -- Unnamed AMD executive

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