From voice to broadband: FCC redirects its $8.7B in phone bill fees

By Matthew Lasar

ARS Technica

Can the Federal Communications Commission save a huge government program that overpays carriers to provide old school phone service, overtaxes subscribers to subsidize it, discourages modernization, and doesn’t even offer broadband to the low income and rural consumers it purports to serve?

Yes it can, insists FCC Chair Julius Genachowski.

The Commission’s $8.7 billion Universal Service Fund and Intercarrier Compensation system was designed “for a world that no longer exists,” Genachowski told the Information Technology and Innovation Foundation on Monday. The USF was created “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.”

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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.

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