FCC Unveils Connect America Fund

The plan will provide dedicated support to extend mobile broadband to large areas of the country that are currently shut out.

Federal Communications Commission chairman Julius Genachowski outlined a plan to reform and modernize the Universal Service Fund and Intercarrier Compensation system in a speech delivered at FCC headquarters. The plan would, if adopted by the Commission later this month, reform the USF/ICC to unleash a series of benefits, including expanded broadband infrastructure, for millions of Americans.

The plan is designed to help deliver more value for wireless consumers, increase private investment, and spur near-term and long-term job creation. In addition, the plan will provide dedicated support to extend mobile broadband to large areas of the country that are currently shut out from the benefits of advanced mobile services.

Despite spending $4.5 billion per year, USF is failing to get broadband to approximately 18 million Americans in rural areas. The new plan would ensure money is spent in a more targeted and efficient way, Genachowski said.

"Our plan would deliver tremendous benefits for consumers. Accelerated broadband build-out and upgrades to networks mean that millions more consumers of all ages will be able to enjoy the economic and social benefits of broadband," he stated. "And consumers overall will be treated more fairly, thanks to the elimination of deep inequalities ingrained in the current system, cuts in wasteful spending and constraints on the growth of a fund that is paid for by consumers. We estimate that wireless consumers will see more than $1 billion in annual benefits from ICC reform alone."

The first plan's main goals would be ensuring universal availability of "robust, scalable, affordable broadband" to homes, businesses and anchor institutions in unserved areas. The Connect America Fund would begin near-term build-out to hundreds of thousands of consumers in 2012, and would ultimately help get broadband to the 18 million Americans who can't get it today.

Ensuring universal availability of affordable mobile broadband through a new Mobility Fund, which would be part of the Connect America Fund, is the plan's second major goal. Deployment of state-of-the-art mobile broadband would be extended to more than 100,000 road miles where Americans live, work and travel. In addition to a one-time shot-in-the-arm effort to accelerate deployment of 4G networks in 2012, this Fund would provide "significant ongoing support" for rural mobile broadband.

Genachowski detailed the critical ways in which the current USF/ICC system is broken and in urgent need of reform, such as being outdated, wasteful, inefficient and unaccountable, thus putting increasing burdens on consumers. "Like USF, the current ICC system is unfair to American consumers. It forces hundreds of millions of consumers across the country to pay higher bills to subsidize monthly local telephone bills as low as $8 for other consumers," he said. "By eliminating billions of dollars in hidden subsidies that are currently built in to wireless and long-distance bills, consumers can expect reduced costs, better value for their money or both."

Last year, Genachowski started pushing for improved mobile broadband, saying that deploying 4G wireless networks would help allow the United States to catch up with other industrialized nations that currently offer faster, more complete wireless broadband coverage. "We need to have enough of an infrastructure here for companies to innovate here, launch here and want to do business here," he said at a 2010 D8 technology conference.