FCC’s Genachowski shifts focus to broadband access in rural areas
Federal Communications Commission Chairman Julius Genachowski wants to overhaul a much-criticized program that helps provide phone service to rural areas by focusing instead on supplying high-speed Internet.
The decades-old Universal Service Fund, funded by phone carrier fees charged to long-distance customers, has spread phone service to residents in hard-to-reach areas that often are unprofitable for companies to serve, Genachowski said in a speech Monday to the Information Technology and Innovation Foundation.
But the fund, which now has about $8 billion, has become highly inefficient, he said. In some cases, it pays more than $20,000 a year to provide a single home with phone service.
“The program is still designed to support traditional telephone service. It’s a 20th-century program poorly suited for the challenges of a 21st-century world,” Genachowski said. “In its current state, the program is not getting the job done. It’s leaving millions on the outside looking in and wasting taxpayer dollars every year.”
Reforming the fund was a priority of the FCC’s National Broadband Plan, which was released last year with a goal of ensuring that at least 100 million homes have access by 2015 to affordable networks delivering Internet services at speeds much faster than today.
Genachowski said in an interview that his main goal was to modernize and streamline the fund.
His plan calls for major changes, particularly to the complex payments known as intercarrier compensation that telecommunications companies pay one another as they transmit calls over one another’s networks. He wants to use the savings from that and other changes to help pay for a new Connect America Fund.
“At the end of this transition, we would no longer subsidize telephone networks. Instead we would support broadband,” Genachowski said in his speech.
“As we do this, we will make sure that all Americans continue to have access to voice service and can make calls from their homes,” he said. “Voice will be ultimately one application that consumers can use over their fixed or mobile broadband connections.”
The FCC is set to take an initial vote on the plan Tuesday, starting the process of receiving public comments on the new rules.
Telecom firms have pressed for years for changes to the fund, and Genachowski said he had received positive feedback from the industry to his ideas.
Verizon Communications Inc. said it supported Genachowski’s call for changing the fund and said he presented “a good road map.”
But Genachowski is wading into controversial territory. Some rural lawmakers want the fund expanded to extend high-speed Internet access, while others have called for the fund to be eliminated because they say it is no longer necessary.
