The Federal Communications Commission wants to utilize government programs that could help make high-speed Internet accessible for all Americans.
The Universal Service Fund, a program that subsidizes telephone service in poor and rural areas, is being studied by the FCC, who wants to revamp the program as part of their national broadband plan that is due in Congress on March 17.
The FCC says it wants to transform the program over the next ten years to pay for high-speed Internet access instead of the voice services it currently finances. Creating a new program — the Connect America fund — within the Universal Service Fund to subsidize broadband is their main goal. They would also like to see a Mobility Fund to expand the reach of 3G wireless networks.
“It’s time to migrate this 20th-century program,” said Blair Levin, the FCC official overseeing the broadband plan. “We need to move the current system from the traditional networks to the new networks.”
The Universal Service Fund was originally established to ensure that all Americans had access to a basic telephone line. Today, the program subsidizes phone service for the poor, funds Internet access for education and even pays for high-speed Internet in rural health networks. But its main function as still bringing phone service to remote areas around the country where it is financially absurd for private companies to build networks.
Funding for the program comes from surcharges that businesses and consumers pay on their long-distant bills. The $8-billion-a-year program is losing its revenue base, and with rising interest from the FCC to hopefully use it for broadband subsidies, something more may need to be done to keep it afloat.
The FCC plans to lay out several options to pay for the proposals it outlined, including one that requires no extra financing from Congress and one that would accelerate the construction of broadband networks if Congress approves a $9 billion one-time pledge.
The FCC says they also plan to save money by subsidizing only one broadband service in any area. Critics of the program are worried that if the plan goes through, the FCC would look to wireless companies for broadband instead of landline systems. In response, Levin said Connect America would not favor one technology over another.
Any changes made to the Universal Service Fund would also affect the “intercarrier compensation” system. The FCC says its proposal also outlines revamping that system as well. Rural phone companies rely heavily on both systems.
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