Broadband connectivity in rural America could undergo a major transformation if the Federal Communications Commission reroutes the Universal Service Fund (USF) from subsidies for voice to subsidies for high-speed Internet. The FCC is expected to launch an effort this week to refocus more than half the nearly $8 billion fund in that direction.
On Tuesday, the FCC will seek public and industry comments about the plan to redirect the USF, which currently provides support for low-cost phones in rural areas, phone service to low-income Americans, and Internet connections for schools and libraries. The fund is supported by a $1 to $2 charge on monthly phone bills for all consumers.
‘The World Has Changed’
In a speech scheduled for Monday and released in advance to the press, FCC Chairman Julius Genachowski said that “while the world has changed,” the USF “has stood still, and even moved backward.” His speech was for a research institute in Washington, D.C., the Information and Technology Foundation.
The current arrangement, according to Genachowski, “was designed for a world with separate local and long-distance telephone companies, a world of traditional landline telephones before cell phones or Skype, a world without the Internet — a world that no longer exists.”
Currently, multiple phone companies in the same rural area can receive USF funds, although that indicates competition to provide service where previously there was little or none. Genachowski said more than $100 million currently supports areas where there is competition.
There are also reported instances where, under the current arrangement, the fund could pay more than $20,000 annually to connect a single household to phone service.
While the agency outlined in last spring’s National Broadband Plan the new goals that the fund might undertake, details about how new funding formulas might work haven’t been detailed. If the new direction is approved, it’s expected…