Should USF Be Used For Rural Broadband?

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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