The FCC's decision yesterday to revamp its $8.7 billion universal service fund (USF) could provide more government funding for mobile broadband in rural areas without high-speed Internet access.
The agency's overhaul of the fund will cut federal financing of legacy landline telephone services to increase support for fixed and mobile broadband Internet services.
Over the long term, the fund will be streamlined into the agency's technology-agnostic Connect America Fund, which will support fixed, mobile and satellite-based broadband services. The agency also wants to create a Mobility Fund to build out 3G networks in areas of the country lacking the service.
During comments ahead of the agency's vote on reform of the universal service fund, FCC Chairman Julius Genachowski called the current state of the fund and its related intercarrier compensation system "unsustainable."
"It was designed for a world with separate local and long-distance telephone companies; a world of traditional, landline telephones before cell phones or Skype; a world without the Internet – a world that no longer exists," Genachowski said in a transcript of his remarks at the Information Technology and Innovation Foundation on Monday.
Genachowski advocated a technology-neutral approach and pledged to make the universal service fund efficient and fiscally responsible as it shifted from supporting outdated wireline telephone services to broadband Internet services.
"At the end of this transition, we would no longer subsidize telephone networks; instead we would support broadband," he said, adding that voice service would continue to be supported through VoIP over fixed or mobile broadband connections eventually supported by the fund.
CTIA President and CEO Steven Largent praised the FCC for moving ahead with its pledge to reform the universal service fund, which was outlined in the agency's National Broadband Plan last year.
"We agree that comprehensive reform of the federal Universal Service Fund and intercarrier compensation system is necessary in order to ensure these government programs meet the needs of U.S. consumers, who are increasingly relying on mobile wireless communications for not only their voice and broadband services, but also innovative services such as mHealth and mLearning," Largent said, adding that "ensuring support is available for the deployment of mobile broadband services in high cost areas is an essential element for successful reform."