Federal Communications Commission Reforms an $8 billion Phone Subsidy Program By Reallocating Money To Extend Broadband Internet Connections

The chairman of the Federal Communications Commission recently announced a proposal to reform an $8 billion phone subsidy program by reallocating money to extend broadband Internet connections in rural areas. FCC Chairman Julius Genachowski said in a speech Thursday that his plan to reform the Universal Service Fund would put about $4.5 billion into two funds to bring wireline and wireless high-speed Internet connections to 18 million homes that don't have access. He didn't reveal many details of his plan, which critics fear will closely resemble proposals by giant phone companies that could favor them. [1] THE LEDE: Federal Communications Commission Chairman Julius Genachowski announced his plan to reform the Universal Service Fund on Thursday, calling the current system "outdated," "wasteful" and "unfair."

The FCC estimates 18 million Americans live in areas without access to broadband; Genachowski said his plan would cut that figure in half within five years. It's still unclear how similar Genachowski's proposal is to America's Broadband Connectivity (ABC) Plan, which was drafted by the major telecom firms. He said his plan "will not rubber stamp or adopt wholesale the proposals of any stakeholders" but rather he reviewed a variety of suggested proposals and his plan includes elements of many of them. "Chairman Genachowski has taken an important step forward today in bringing broadband -- both wired and wireless -- to all Americans. I strongly support and applaud his efforts and look forward to working with him and his fellow Commissioners to reform the universal service system. Next week, the Commerce Committee will hold a hearing on the need to move forward on these important proposals. We have a real opportunity to close the digital divide in rural America if we get this right.


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