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FCC To Overhaul Phone Subsidy, Expand Broadband Internet

Ankit Tyagi |
October 7, 2011 | 9:19 a.m. PDT

Associate Tech Editor

This Thursday, the FCC proposed revamping an $8 billion phone subsidy program for landline service, known as the Universal Service Fund (USF), in an effort to expand high-speed internet access. The FCC hopes to transform the USF into a "Connect America Fund" providing affordable high-speed internet access to rural areas.

FCC Chairman Julius Genachowski, Photo courtesy of Creative Commons
FCC Chairman Julius Genachowski, Photo courtesy of Creative Commons

With broadband Internet access currently at 65%, the FCC hopes to increase the number of people using high-speed Internet to 90%. FCC Chairman Julius Genachowski believes that, "broadband has gone from being a luxury to a necessity for full participation in our economy and society."

The USF has been the primary fund to support phone services to schools, libraries, and other areas, but has been financed by long-distance charges. With this overhaul, the FCC believes broader access to high-speed Internet has trumped the importance of those previous phone services.

From Ars Technica: 

It will begin shifting USF money to a new Connect America Fund, which will subsidize the provision of broadband services to rural areas that don't currently have access to it. That fund will include money for mobile broadband service. And for the first time, USF subsidies would be awarded using competitive bidding.


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