F.C.C. to Propose Expanding Broadband Service to Underserved Areas


WASHINGTON — The Federal Communications Commission on Tuesday will propose the first steps toward converting the $8 billion fund that subsidizes rural telephone service into one for helping pay to provide broadband Internet service to underserved areas, according to commission officials.

Julius Genachowski, chairman of the F.C.C., is expected to call for a consolidation of existing methods of supporting rural phone service into a new pool of funds.

The F.C.C. chairman, Julius Genachowski, is expected to outline the proposal in a speech on Monday, the officials said.

Most of the money under discussion involves a longstanding subsidy known as the Universal Service Fund, which is paid for through fees tacked onto most consumers’ phone bills and distributed among telephone companies to subsidize the high costs of providing service to rural areas.

Mr. Genachowski will propose phasing out the payments between phone companies, which he says create “inefficiencies and perverse incentives” that result in waste in the fund. The F.C.C. will also propose consolidating existing methods of paying for rural phone service into a new pool to be called the Connect America Fund, to be used for helping pay for making broadband available to underserved areas.

The current Universal Service Fund and its spending methods are “unsustainable,” according to a draft of Mr. Genachowski’s remarks prepared for Monday. “It was designed for a world with separate local and long-distance telephone companies, a world of traditional landline telephones before cellphones or Skype, a world without the Internet — a world that no longer exists.”

Article Continued on New York Times

Let’s hope that the Connect America Fund will allow for municipalities and other government organizations to receive funding to build infrastructure.  Instead of figuring out how to divvy the money up among incumbent carriers, the money should be used to build open-access last-mile infrastructure that the incumbents and new entrants can utilize.  Perhaps some legislative action is needed to determine how funds are disbursed.

About Mark Milliman

Mark Milliman is a Principal Consultant at Inphotonics Research driving the adoption and assisting local governments to plan, build, operate, and lease access open-access municipal broadband networks. Additionally, he works with entrepreneurs and venture capitalists to increase the value of their intellectual capital through the creation of strategic product plans and execution of innovative marketing strategies. With more than 22 years of experience in the telecommunications industry that began at AT&T Bell Laboratories, Mark has built fiber, cable, and wireless networks around the world to deliver voice, video, and data services. His thorough knowledge of all aspects of service delivery from content creation to the design, operation, and management of the network is utilized by carriers and equipment manufacturers. Mark conceived and developed one of the industry's first multi-service provisioning platform and is multiple patent holder. He is active in the IEEE as a senior member. Mark received his B.S. in Electrical Engineering from Iowa State University and M.S. in Electrical Engineering from Carnegie Mellon University.
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