FCC Unveils New National Broadband Internet Plan

Dennis Faas's picture

The Federal Communications Commission (FCC) has come up with an idea to help rural Americans gain access to broadband. It involves an overhaul of the system that currently guarantees telephone service to virtually all of the population.

The current system, the Universal Service Fund (USF), relies on a 15 per cent levy on telecommunications services revenue. This money is then used to subsidize telephone line provision in areas where suppliers say it isn't commercially viable to install lines and still make a profit.

The fund also covers the costs of making sure schools, healthcare facilities and libraries have access to affordable Internet services.

Connect America Fund (CAF) to be Created

The FCC says it's time to launch a new scheme, the Connect America Fund (CAF), which would gradually begin receiving an increasing proportion of the money from the USF.

The Connect America Fund would serve two purposes: firstly, it will increase broadband provision for the estimated 18 million people who don't currently have any access. Secondly, it will provide one-off payments to subsidize the creation of mobile broadband networks.

In both cases, the fund will only pay for work in areas that aren't being served by commercial operators.

One major change with the fund is that there will be a bidding process, meaning multiple firms will compete to take the lowest subsidy to complete a project. That's designed to combat existing criticisms of the USF scheme that say commercial firms often take too much public money for extending access, offering poor taxpayer value. (Source: pcmag.com)

No More Gaming Long-Distance System

As part of the overhaul, the FCC also wants to change the intercarrier compensation system.

An intercarrier system works in such a way that the revenue generated from long-distance calls is divided among telecommunications firms when a call is routed through networks controlled by multiple operators. There are accusations that operators intentionally divert calls along inefficient routes in order to receive larger payments from their rivals. (Source: fcc.gov)

The plan has been put together after a public consultation. It will go to a formal vote by the five commissioners on October 27, though it's exceedingly unlikely it won't at least get a majority vote.

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