FCC to propose $8 billion rural broadband expansion plan

The Federal Communications Commission (FCC) is expected to propose and vote this week on an $8 billion plan that will expand high-speed, fast-access Internet to underserved cities across the United States. The plan will actually be a reallocation of funds the FCC already has in place for telecommunication companies, which subsidizes telephone service for rural areas, and modernizing it into also supporting broadband Internet. Most of the money that will be looked into will come from the Universal Service Fund which is paid off by fees on users' phone bills which then helps pay the cost of providing services to more isolated areas.

FCC chairman Julius Genachowski is expected to make his speech for action to the Information Technology and Innovation Foundation later today followed by a vote tomorrow. The content for his speech has already been made aware of by The New York Times, however.

In his address, Genachowski will argue that the the Universal Service Fund is "unsustainable" because it was "designed for a world with separate local and long-distance telephone companies, a world of traditional landline telephones before cellphones or Skype, a world without the Internet — a world that no longer exists." He will suggest consolidating the Universal Service Fund into a new Connect America Fund which will endow companies to provide broadband Internet service to rural areas, even though the current fund helps subsidize Internet costs in public schools and libraries. Right now, the plan is only outlined to expand broadband through wired connections but the FCC says it will look into seeing if wireless connections make more sense to expand high-speed Internet.

According to the Associated Press, the new FCC rules could also help lead the way for cable companies to begin acquiring money from the fund.

“At the end of this transition, we would no longer subsidize telephone networks; instead we would support broadband,” Genachowski will say but according to the new anticipated guidelines the FCC expects the fund transition to take place during a period of years until a broadband replacement for telecommunications services is found.

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