FCC forms Connect America fund — broadband for rural America

All Americans will have broadband access to Internet and telephone services by the end of the decade under new rules adopted by U.S. regulators. The rules also reform a broken system of phone charges fraught with inefficiency and should result in $2.2 billion in savings passed down to consumers, the Federal Communications Commission estimates.

The FCC voted unanimously on Thursday to modernize its universal service program, aiming to help the 18 million Americans who have no access to broadband where they live and work.

The new rules will shift the roughly $4.5 billion in public money spent annually to subsidize telephone service for rural families to high-speed Internet in rural America and costly-to-serve areas…

“We are taking a system designed for the Alexander Graham Bell era of rotary telephones and modernizing it for the era of Steve Jobs and the Internet future he imagined,” FCC Chairman Julius Genachowski said at the agency’s open meeting.

Broadband buildout to unserved areas could begin in early 2012 under the plan, bringing high-speed Internet to hundreds of thousands of homes in the near term.

The plan approved on Thursday would phase out funding for landline phone service over a period of years as companies move to a competitive bidding process for securing funds for broadband. Companies now receiving phone service subsidies would get first dibs in some areas to receive support for deploying broadband service.

The rules will also reform the complex system of payments among carriers called intercarrier compensation, gradually reducing per-minute intercarrier compensation charges…

The new Connect America Fund created by the rules will have a firm $4.5 billion a year budget, the first budget constraint ever imposed on the program.

FCC Commissioner Robert McDowell said the fund will not be able to exceed its annual $4.5 billion cap through 2017 without agency approval. “It is my hope that competitive forces will flourish and the development of new technologies will create additional efficiencies throughout the system,” McDowell said.

We all know how well Congress and the corporations sharing their beds strive for competitive forces.

Actually, politicians and administrative hacks may be stuck with the democratic basic premises of legislation that goes back to FDR and the Communications Act of 1934. Republicans hated it, then – I imagine they still do; but, they’re stuck with the egalitarian premises.

3 thoughts on “FCC forms Connect America fund — broadband for rural America

  1. Bilagáana says:

    “FCC stands by decision to raise broadband prices on American Indians” (7/6/18) https://arstechnica.com/tech-policy/2018/07/fcc-stands-by-decision-to-raise-broadband-prices-on-american-indians/ Separately, the FCC is considering a move that would kick resellers out of the Lifeline program nationwide, not just in tribal areas. https://arstechnica.com/tech-policy/2018/03/even-isps-hate-ajit-pais-plan-to-take-broadband-choice-away-from-poor-people/

  2. Ma Bell says:

    Ajit Pai loses in court—FCC can’t kill broadband subsidy in Tribal areas : FCC trying to kill $25 subsidy in urban areas and limit subsidy in rural areas. https://arstechnica.com/tech-policy/2018/08/court-blocks-fcc-plan-that-could-cause-mass-disconnection-in-tribal-lands/ The FCC decision, originally slated to take effect later this year, would have made it difficult or impossible for Tribal residents to obtain a $25-per-month Lifeline subsidy that reduces the cost of Internet or phone service for poor people. But on Friday, a court stayed the FCC decision pending appeal, saying that Tribal organizations and small wireless carriers are likely to win their case against the commission. The court’s stay blocks implementation of both those changes, the next step is for the court to schedule oral arguments. In a related but not-yet-finalized move, FCC Chairman Ajit Pai has proposed kicking resellers out of the Lifeline program throughout the US. This would limit availability of the basic $9.25 subsidy both in Tribal areas and in the rest of the US.

  3. Rube says:

    The Federal Communications Commission (FCC) has rejected Starlink’s application to receive $885.51 million in broadband funding, essentially canceling a grant awarded by the FCC during then-Chairman Ajit Pai’s tenure.
    Starlink was tentatively awarded the Rural Digital Opportunity Fund (RDOF) grant in December 2020. But the satellite provider still needed FCC approval of a long-form application to receive the money, which is intended for areas with little or no high-speed broadband access. https://arstechnica.com/tech-policy/2022/08/fcc-rejects-starlinks-886-million-grant-says-spacex-proposal-too-risky/
    The auction originally awarded $9.2 billion to 180 broadband providers. Rosenworcel has doled money out on a rolling basis as providers secure final approvals. “To date, the RDOF program has authorized more than $5 billion in funding to bring primarily fiber gigabit broadband service to over 3,000,000 locations in 47 states,” the FCC said today. “With support from this program, hundreds of carriers have already begun deploying these future-proof networks to connect unserved areas.”

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