FCC Reforms Universal Service

The FCC today announced their “Connect America Fund” a new Universal Service Fund reform plan. USF’s annual budget has grown from $4.9 billion in 2000 to $8 billion. It is funded through a fee of more than 15 percent on long-distance telephone bills, but many U.S. voice customers are abandoning traditional long-distance service for mobile phones or VoIP.

FCC Chairman Julius Genachowski outlined the USF reforms in a speech at the FCC today (pdf). He said USF was broken, unfair and wasteful.

Under the reform, the government aims to save $1 billion annualy while simultaneiously subsidizing the deployment of broadband to rural residential users. It would start paying for broadband deployment to areas now unserved by 2012 — and bring changes to phone bills.

Among the changes is competitive bidding for the funds, shifting them from phone to broadband, and giving VoIP a fairer share of ICC payments. The four-member FCC aims to vote on the proposal on Oct. 27.

The fund would have two core goals:

  • Ensuring universal availability of robust, scalable, affordable broadband to homes, businesses and anchor institutions in unserved areas. The Connect America Fund would begin near-term build-out to hundreds of thousands of consumers in 2012, and would ultimately help get broadband to the 18 million Americans who can’t get it.
    today.
  • Ensuring universal availability of affordable mobile broadband through a new Mobility Fund, a part of the Connect America Fund. Deployment of state-of-the-art mobile broadband would be extended to more than 100,000 road miles where Americans live, work, and travel. In addition to a one-time shot-in-the-arm effort to accelerate deployment of 4G networks in 2012, this Fund would provide
    significant ongoing support for rural mobile broadband.

The FCC’s national broadband plan, released in early 2010, contained the basic elements of the plan Genachowski laid out Thursday, and the FCC launched a notice of proposed rulemaking on USF reform in February.

The Universal Service Fund was created by the FCC in 1997 to bring phone connectivity to rural areas, and broadband connectivity to schools and libraries. Currently, all telecommunications companies that provide service between states, including long distance companies, local telephone companies, wireless telephone companies, paging companies, and payphone providers, are required to contribute to the federal Universal Service Fund.

Karl Bode of Broadband Reports opines, “AT&T and Verizon have gotten enough state and federal subsidies over the last generation to deliver fiber to the home to every U.S. citizen several times over. The reality is they shouldn’t be getting another cent, and they certainly shouldn’t be getting any more money from a program the FCC hasn’t bothered to adequately monitor until only recently.

Big telecom companies have proposed their own America’s Broadband Connectivity plan for reform that cable operators say puts a thumb on the scale in favor of those companies.

An alternative reform might encourage wireless carriers to build out a shared public/private 700 MHz wireless network. That could save $12 billion AND deliver universal broadband.

Without subsidies. Without debt.

Currently the FCC wants to auction off unused television frequencies to the highest bidder – essentially eliminating the last vestige of “free” spectrum. The FCC would then use those funds to help pay for a dedicated $12 billion public service network that would not be available for the general public (and likely cost more than originally projected).

Shared public/private 700 MHz service could deliver nearly universal service say detailed FCC studies while unlicensed White Spaces could fill in the blanks.

What’s wrong with that plan?

Related stories on DailyWireless include; Seybold: Furgetabout Video on LTE Public Safety Band, Broadband Disability Act, Public Service Radio Convention, Public Safety Net Removed from Debt Ceiling Bill, The D-Block Gamble, D-Block Gets a Hearing, National Wireless Initiative, White House: D-Block to Police/Fire, State of the Spectrum, FCC Green Lights Lightsquared, Oregon’s $600M Public Safety Network Likely Killed, Bay Area 700 MHz Net in Altercation , SF Announces LTE First Responder Net, New York Cancels Statewide Wireless Network, M/A-COM to NY: We’re Good, The D-Block Gamble, National Wireless Initiative, White House: D-Block to Police/Fire, White Space War, White Space To Go, White Spaces Get IEEE Standard, Broadcasters: Portable Devices Kill DTV, Mud Fight in White Space, LTE Vrs WiMAX: It’s a Wrap!, The 700 Mhz Club

Posted by Sam Churchill on .

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