updated 04:30 pm EDT, Thu October 27, 2011
Would bring wireless and Internet for rural areas
Earlier this month, the FCC's chairman, Julius Genachowski, called for a revamping of the programs through which phone and internet connectivity would be brought to rural America. Genachowski proposed the transition of the wire-line-focused Universal Service Fund (USF) into the wireless and broadband centric Connect America Fund. Today, the FCC has adopted that plan.
The USF is a $8 billion fund that subsidizes phone service in rural areas and for the poor. Under the new Connect America Fund, the emphasis would be redirected to providing high-speed Internet access to about 18 million people living in rural areas over the next six years. About seven million of these don't have phone service, and the objective would be to provided them with cellphone access.
The new plan would cap the size of the fund at $4.5 billion annually. It would still continue to be paid for from monthly surcharges on consumers' and businesses' phone bills. The FCC claims that for most consumers, the monthly fee would stay flat or decline.
The FCC estimates that the plan, as adopted, will create 500,000 jobs.
Critics have suggested that the fund by its nature might hike service bills as a whole. It also isn't necessarily expected to spur carriers to grow their networks or to create jobs, since carriers have often resisted growing their networks in favor of maximizing their profit in urban areas.