The US communications regulator revealed a proposal yesterday for universal broadband coverage by the end of the decade. It is estimated that around 18 million Americans do not have access to broadband where they live or work, despite $4.5 billion in public money being spent each year to subsidize telephone services for rural households.
Federal Communications Commission chairman Julius Genachowski proposed the strategy for revamping the subsidy program during a speech yesterday. He acknowledged the existing program was ineffective and broken.
"The costs of this broadband gap are measured in jobs not created, existing job openings not filled and our nation's competitiveness not advanced," Genachowski said.
Earlier in the year, the FCC proposed modernizing the $8 billion universal service fund, currently paid for by fees added to consumers' telephone bills to push forward infrastructure investment and remove inefficiencies in the current program.
This would see the largest program in the universal service fund move towards directly supporting fixed and mobile broadband services, whilst phasing out funding for duplicate services serving the same areas.
Consumers' could begin to see the benefits of the new strategy as soon as early 2012, bringing high speed internet access to hundreds of thousands of homes in the short term. "It will help cut the number of Americans bypassed by broadband by up to one half over the following five years, and it will put us on the path to universal broadband by the end of the decade," Genachowski added.
But not everyone is convinced that the proposed plan is the best way forward. The American Cable Association says they are concerned that phone companies will get "first dibs" on the funding while other broadband providers like cable may have to wait a few years for the option to competitively bid to receive funding support.
"The chairman's plan locks in a sole-source contract worth billions of dollars for over ten years to a handful of incumbent large telecom companies," ACA Chief Executive Matthew Polka commented in response to Genachowski.
Genachowski argued, "a flash-cut to competitive bidding in some parts of the decades-old program risks consumer disruption, build-out delays, and other unintended consequences."
The reform is set for vote at the next FCC meeting on October 27.