The Federal Communications Commission rolled out plans today to provide broadband service to over 18 million Americans that are without hi-speed Internet access. This plan calls for a change in the Universal Service Fund (USF), a government fund originally setup over 14 years ago to provide all Americans with access to phone service. The new proposal would create the Connect America Fund (CAF) and shift approximately $15.5 billion over the new ten years from the Universal Service Fund into the Connect America Fund. These new funds would produce broadband infrastructure for thousands of consumers starting during 2012.
In addition, the fund would set aside money for states will to help create mobile broadband networks for rural areas that don’t have access to wired broadband service. The shift from the USF to the CAF is also designed to help end wasteful spending on telecom services since the vast majority of Americans have access to phone service already. According to FCC Chairman Julius Genachowski, the fund is dishing out over $20,000 a year per phone line to a handful of companies. Companies will also be required to place bids for access to the CAF fund, likely outlining plans for broadband expansion as well as identifying areas in need of service.
In addition to the creation of the CAF, Genachowski also proposed an elimination of billions in subsidies that are tacked onto long-distance and wireless bills. This change would be applied to the inter-carrier compensation, a system in which one carrier shifts traffic to another carrier. While the FCC voted to make massive changes to the USF earlier this year, these proposed changes will be considered by the FCC commissioners and the vote on the changes will take place later this month. Representatives of both Sprint and AT&T applauded the changes and hope that this policy shift lowers costs for consumers.
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