The FCC has proposed a new public subsidy programme to support the extension of broadband services to underserved parts of the country.
FCC Chairman Julius Genachowski announced a set of reforms that will replace two current subsidy programmes, the…
The FCC has proposed a new public subsidy programme to support the extension of broadband services to underserved parts of the country.
FCC Chairman Julius Genachowski announced a set of reforms that will replace two current subsidy programmes, the Universal Service Fund (USF) and InterCarrier Compensation (ICC).
The USF is a US$8bn-a-year programme that subsidises private companies to provide telephone services in underserved areas. InterCarrier Compensation (ICC) is a system of charges between carriers. According to the FCC, it involves one carrier paying another in order “to originate, transport and/or terminate” telecoms traffic.
Genachowski’s proposal, which draws on ideas in the 2009 National Broadband Plan and a long consultation process, has two key pillars.
The first major change will be turning one part of the USF, the “High Cost” programme that is focussed on providing telecoms service in areas where the cost of providing services is high. It currently accounts for US$4.2bn of the total US$8bn USF.
The High Cost programme will be turned into a new “Connect America Fund”, which will aim to expand broadband access to the 18m Americans currently without it, and to ensure universal access to mobile broadband.
Genachowski said that the plan would “put us on the path” to universal broadband by the end of the decade.
He emphasised that the new fund is not designed to supplant private investment.
“Funding will be targeted exclusively at areas without an unsubsidized competitor, and where support is needed to extend or sustain broadband networks, eliminating wasteful spending and promoting healthy competition,” he said.
The second major change will be a set of reforms to the ICC system.
These include closing various loopholes that, according to Genachowski, allow some carriers to divert wireline traffic to wireless networks, and thereby bypass ICC charges.
It will also involve phasing down access rates “over a measured but certain multi-year transition path”.
Genachowski said he would now circulate the plan to his fellow commissioners at the FCC and would put it on the agenda for a vote at the end of October.
