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Summary:

Policy-makers want to split the Universal Service Fund, which brings in around $7 billion or so every year and is used to subsidize the old-fashioned phone systems in rural areas, into three distinct parts: one to subsidize wireless services, another for the old-fashioned phone services, and […]

Policy-makers want to split the Universal Service Fund, which brings in around $7 billion or so every year and is used to subsidize the old-fashioned phone systems in rural areas, into three distinct parts: one to subsidize wireless services, another for the old-fashioned phone services, and a slice to subsidize the broadband buildout in rural areas.

The Joint Board recommended capping the total amount of money the three funds could distribute to companies at $4.5 billion a year, about as much as it expects to use for subsidies this year. The rest of the $7 billion would be spent on programs that ensure high-speed Internet connections for schools and libraries.

It is not such a bad idea, and other countries, India for instance, have put similar policies in place, but I am with FCC Commissioner Michael Copps on this one. We need more money set aside for broadband, or in fact scrap the USF as we know it and set up a more broadband-focused rural fund.

“That’s like fighting a bear with a fly swatter,” Copps said in a statement. “Bringing broadband to the far corners of the nation is the central infrastructure challenge our country confronts right now.”

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  1. The USF definitely needs reform. Today the internet is a much more important tool that the telephone. Buildout to rural and underserved areas will be crucial to their economic survival. We need new policies that encourage investment and provide consumer and worker protections. The Communications Workers Of America are working towards this goal with their project, Speed Matters. Check out the website for more information at http://www.speedmatters.org

  2. Scrap it and provide incentives for companies to expand into rural areas. If there’s money to be made, it’ll happen. The USF has long outlived its usefulness, and we shouldn’t continue to fund it.

  3. The problem with taxes is that once government has them, they don’t want to let them go. (The Federal income tax was supposed to be a temporary tax to pay for the civil war.)

    I don’t think anyone would argue that the USF is still needed… so rather than get rid of it, our brilliant policymakers want to spend it on pork. Lovely.

  4. In a perfect world, it would be a good idea to have the government pay for the buildout of rural internet services. But if you talk to people who are actually providing, say, Wi-Fi broadband, you’ll learn that the USF pays for “service to CEOs’ ski shacks but not for the regular people in town, because even though we’re less than 1,000, we’re a town, so we don’t count.”

    The cable, phone, and cell monopolies manipulate subsidies to their advantage, so that those subsidies pay for services to rich people and fail to provide service that would not have been provided absent that subsidy. Small businesses are entitled to file for USF, and some actually manage to receive funds, but mostly the money goes to the companies that have PACs in DC.

    Get rid of it.

  5. USF is simply not needed anymore and it is a giant source of telecom pork.

    How about this one, a $500M subsidy to wire 5,400 homes in Hawaii with fiber when most of the people already had access to DSL. That’s close to $100,000 a person.
    http://gordoncook.net/wp/?p=26

    USF = pork, pork, pork, pork, pork!!!
    It was far cheaper to pay for a satellite connection forever on these lots.

  6. I’ll support anything to get my parents access to broadband out on the farm. Every “tech support” call I make to their place ends with me getting frustrated and just bringing the computer back to my house to download the latest updates.

  7. The Joint Board has finally recognized that high-speed Internet services are essential to the nation’s education, public health, and public safety needs. With this finding, it is obvious that the our communications goals should include universal availability of broadband Internet services at affordable and comparable rates throughout the country.

    The Joint Board’s recommendation is a critical recognition that we must modernize the universal fund for the digital age and extend broadband’s reach to those who can benefit most. As communications technologies change, universal service must change with it, thus helping advance America’s communication future. However, I am disappointed that in taking this historic step that the Joint Board didn’t go farther – to transition more significantly from supporting outdated analog technologies to supporting digital technologies. The challenge and benefits from universal broadband are immense – but they chose to attack the challenge with a rubber-band gun rather than a concerted national effort to make us the first in the world in broadband. Some say we can’t afford to make this change. However, it is becoming increasingly clear that we can’t afford not to.

    Our nation’s commitment to ubiquitous and affordable communications has never been more important than now. Making broadband as common as telephone service must be our goal in the 21st century. We are only on the threshold of an information technology revolution if we preserve and strengthen our guarantee of universal, affordable communication access for all Americans.

    The Federal Communications Commission should take the opportunity of USF reform to bring the promise of 21st century communications to all American. It should use USF support to extend broadband’s reach to those who can benefit most, envisioning USF as not just a safety net to ensure an old communications service, but as a springboard for access to the engine of our economic future.

  8. links for 2007-11-26 | Brewed Fresh Daily Tuesday, January 1, 2008

    [...] GigaOM » Blog Archive Should A Portion Of USF Be Used For Rural Broadband? « [...]

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