FCC Proposes New Way to Subsidize Internet Services

By Cindy Waxer February 08, 2011

Government regulators think they’ve found a way to subsidize efforts to bring broadband to all of rural America. The Federal Communications Commission has voted 5-0 to begin developing a plan, that would use government subsidies for landline telephone service to pay for high-speed Internet connections in rural areas.

By overhauling the $8 billion federal program, called the Universal Service Fund, the FCC hopes to give a kick-start to rolling out the IT infrastructure needed to support the buildout of high-speed Internet services across the country.

Earlier this year, President Barack Obama took the opportunity during his annual State of the Union speech to the U.S. Congress to emphasize the need for more robust high-speed wireless services, in order to satisfy the increasing demands of consumers and organizations, as well reach out to rural areas.

"Within the next five years, we will make it possible for business to deploy the next generation of high-speed wireless coverage to 98 percent of all Americans," President Obama said. "This isn't just about a faster Internet and fewer dropped calls. It's about connecting every part of America to the digital age."

This isn’t the first time the President has called for expanded broadband access. TMCNet.com reported back in June that Obama signed a memorandum calling for the National Telecommunications and Information Administration (NTIA), in collaboration with the Federal Communications Commission (FCC), to make 500 megahertz of spectrum available for fixed and mobile wireless broadband in the next 10 years.

In the meantime, FCC Commissioner Michael Copps said in a statement quoted by the Wall Street Journal, “We see some money, frankly, being wasted right in sight of the need for funds in unserved areas."

"As a 21st century program, the universal service fund should evolve away from subsidizing inefficient 20th century systems and support the efficiencies of current technologies as brought about by competitive pressures," FCC Commissioner Robert McDowell said in a statement.




Edited by Jamie Epstein

TechZone360 Contributing Editor

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