FCC Set to Change Funding Rules for Providing High Speed Internet to the Poor

The Washington Post, via the AP newswire is reporting that the Federal Communications Commission is very near to reaching an agreement to change the rules regarding the Universal Service fund. Originally meant to ensure that all Americans were able to receive telephone service, the fund, which is paid for by a surcharge on all long distance calls, has been expanded in recent years to include broadband internet services.

The change is coming about due to protests by consumer interest groups who feel that several of the large phone carriers have been profiting from income they receive from the fund, by not using it to lay new phone lines to far flung locations. But phone and now cable companies have not been sitting idly by. They clearly understand how changing how the fund is run could adversely impact their bottom line of the changes are made to soothe the consumer interests group. They claim that forcing them to lay lines to far flung locations quite often costs more than they get back in reimbursements. As more Americans connect to the Internet through high speed broadband services, the stakes grow ever higher as rates for Internet services are generally far higher than for phone service, at least the old fashioned land line variety. Selling broadband, as cell phone carriers have learned over the past few years, is also far more profitable.

As currently proposed, the plan is to cap the new fund at $4.5 billion annually, which means the surcharge for long distance calls appearing on customer’s bills would be capped as well. In the revised plan, instead of doling out funds on a first come first serve bases, they would be set by regions and in some cases specifically to target areas of the country that currently have on service of either kind.

In trying to fashion a new policy, the FCC has said repeatedly that its main goal is to ensure every American, regardless of ability to pay, should be given access to broadband Internet services. This means that if the surcharges don’t cover it, Congress will likely have to pass a bill specifically geared towards paying the broadband costs for those who cannot afford.

Consumer groups on the other hand, who also see a need for increased government subsidies for helping those who cannot afford broadband costs, are watching carefully as they worry that powerful carrier lobbyists are pushing for medications that would do little more than increase the amount of money that goes into the pockets of the carriers that would ultimately deliver the services.

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