FCC weighs creating fund to boost broadband

By Reuters
Posted Oct. 14, 2010 at 2:40 p.m.

A new fund could help bring high speed Internet to unserved and remote areas of the United States, U.S. telecommunications regulators said on Thursday.

The Federal Communications Commission proposed allocating universal service funds — fees consumers pay telephone companies to subsidize landline phone services for low-income and rural families — to create a “mobility fund” to expand broadband Internet to areas without service.

“The current program is designed to support the communications networks of the past, not the future,” FCC Chairman Julius Genachowski said at the commission’s monthly meeting.

Challenging terrain, long distances from existing networks and low population density are among the factors creating so-called mobility gaps — areas broadband providers consider not profitable to serve.

More than 4 million Americans live within these gaps without access to current generation, or 3G, mobile services, the FCC said.

The mobility fund would use a portion of the reserved universal service funds that Verizon Wireless, a joint venture between Verizon Communications Inc and Vodafone Group, and Sprint Nextel Corp voluntarily surrendered in 2008.

The fund would amass between $100 million and $300 million to provide a one-time capital infusion to shrink the United States’s mobility gaps and bring 3G and next-generation 4G services to rural, low-income and remote areas.

“Most Americans anticipate that their mobile devices will work no matter where they are. With this fund, we have an opportunity to meet that expectation,” FCC Commissioner Mignon Clyburn said.

The FCC proposed using a reverse auction to determine which service providers and what areas would receive the funding to expand broadband services.

“Support would be allocated to the providers offering to extend service for the lowest per unit amount in their area, starting with the lowest bidder overall and continuing until all the funds are allocated,” explained Erik Salovaara, an assistant division chief in the FCC’s wireless telecommunications bureau.

Still, questions remain. FCC Commissioner Robert McDowell raised concerns over regulatory hurdles, implementing an objective selection process for service providers, and ensuring that the most remote parts of the nation are not left out.

The proposal is just the first step in the FCC’s plan to overhaul the universal service fund.

“We expect to make further recommendations to modernize universal service by creating a Connect America fund to ensure broadband is available for all Americans,” said Sharon Gillett, chief of the FCC’s wireline competition bureau.

The FCC also proposed measures to help consumers avoid eye-popping monthly cell phone bills by unexpectedly triggering additional charges to their monthly plans.

Proposed regulations would curb so-called bill shock by making mobile phone companies send text or voice alerts to customers before charging them for services not covered by their plans.

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