FCC to tackle universal service reform

The Federal Communications Commission adopted a Notice of Proposed Rulemaking (NPRM) to try to reform the Universal Service Fund and Intercarrier Compensation system, both of which are “plagued with waste and inefficiency,” according to FCC Chairman Julius Genachowski.
In a unanimous vote, the agency is taking first steps to design a new USF fund that would stop paying companies to fund telephone service in hard-to-reach or expensive-to-deploy areas and instead fund broadband connections. Initially, the agency will tackle intercarrier compensation (ICC) and a high-cost fund program.
High-speed broadband access has replaced telephone service, Genachowski said, noting that 25% of U.S. households rely only on wireless service. Up to 24 million people in the United States can’t get broadband service even if they wanted to, he added.
A new Connect America Fund will be funded out of savings from existing USF funding that is being used inefficiently and without accountability, Genachowski said. The agency said it would modernize the programs to support broadband networks; ensure fiscal responsibility; demand accountability and enact market-driven and incentive-based policies. Companies receiving USF funding will not be cut off immediately but at the end of the transition, any subsidies would be for broadband, not phone service.
In addition, the NPRM builds on the already-announced Mobility Fund, which the FCC proposed in October.
That NPRM is trying to identify areas that do not have access to 3G technologies today and implement a reverse auction, which would allow the low-bid operator to build out those areas. The FCC also is seeking comment on whether to make support available to any unserved area or to target support by making it available in a limited set of unserved areas. Finally, the commission is asking what minimum performance and coverage requirements should be established for the service.