FCC Overhauls the Universal Service Fund

What’s the Universal Service Fund and what does that mean to those of us who want and need broadband? Let’s just say, it’s a big deal.

“We are taking a system designed for the Alexander Graham Bell era of rotary telephones and modernizing it for the era of Steve Jobs and the Internet future he imagined,” said FCC Chairman Julius Genachowski.

In other words, by improving efficiencies in how technologies are handled, rural places can be brought into the 21st century, without increasing the amount of funding already set aside for rural communications systems. More details can be found in the USA Today article: http://www.usatoday.com/tech/news/story/2011-10-27/fcc-rural-broadband-fund/50960016/1?loc=interstitialskip or at http://www.fcc.gov/encyclopedia/connecting-america.

Still, I’m constantly amazed at how many people feel that rural broadband should not be funded at all, that internet access is a privilege granted only to those who live in densely populated areas. They say, “If you want broadband, move to the city”. I say that this is the height of self-interest and denies that rural places have anything to offer those who don’t live there.

If you live in the city or the suburbs, you benefit directly from rural production. You wouldn’t have food, building materials, oil, gas, or all the minerals that go into your iPads and X-boxes if it weren’t for folks who live and work in the country. By denying these industries, and the people who work in them, access to high-speed connections, we are actually increasing the costs of those goods to ourselves. When farmers have to call long distance on a conventional phone in order to get their produce to the right market, they have to pass those costs onto their consumers. The same goes for any industry that tries to succeed on an uneven playing field. By getting the efficiencies of new technologies into the hands of businesses, rural or urban, we make everyone’s life better. I won’t even mention how difficult it is for rural industries to compete in a world market, where other countries have much more advanced high-speed systems. (Oh pooh! I just mentioned it.)

Here are a few statistics about the benefits we’ll see from the overhaul of the Universal Service Fund:

  • Americans living in unserved rural areas who will receive access to broadband over the next decade: 18 million
  • Consumers who will get mobile broadband coverage where they live, work, and travel: millions
  • Jobs created related to new deployment in rural areas over five years: 500,000
  • Annual economic benefits in rural areas from new deployment: $700 million
  • Annual increase in economic growth, creating jobs: $50 billion
  • Benefit to cost ratio for consumers: $3 to $1
  • Percentage of FORTUNE 500 companies that post job openings online only – and require online applications: over 80 percent
  • Graduation rates for students with broadband at home compared to similar students with no broadband access: 6% to 8% higher



The Open Internet and Rural Broadband

On April 8th, (yes, that was just this last Friday during the big budget debate) the House passed   H. J. RES. 37 concerning the openess of the internet. This is what the bill says, in its entirelty: 

    Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That Congress disapproves the rule submitted by the Federal Communications Commission relating to the matter of preserving the open Internet and broadband industry practices (Report and Order FCC 10-201, adopted by the Commission on December 21, 2010), and such rule shall have no force or effect.

So, what does that mean? Here is the text of Report and Order FCC 10-201. It is concerned with the limitiations that internet service providers are allowed to place on users and content. It significantly curtails “the ability of broadband providers to favor or disfavor Internet traffic to the detriment of innovation, investment, competition, public discourse, and end users.” In other words, it keeps the internet open and accessible. H. J. RES. 37 would kill the FCC’s ability to keep the internet neutral.

The Senate version is S.J.RES.6. and has not been passed yet. Need I mention that this may indeed be the perfect time to contact your Senator to ensure that this resolution not be passed?

In other congressional news, a new bill, HR 1083 – Rural Broadband Initiative Act, introduced March 15th, amends the Rural Electrification Act of 1936 to establish in the Department of Agriculture (USDA) the Office of Rural Broadband Initiatives. Is the USDA the right department to handle rural broadband? Truly, I don’t know, but somebody needs to ensure that broadband reaches us. Frankly, rural broadband is not going to happen if we merely encourage private enterprise to provide it. It’s going to take another act like the ones that brought electricity and telephones to every house in the country.

The bill I really like is Maria Cantwell’s S.74: Internet Freedom, Broadband Promotion, and Consumer Protection Act of 2011. It ensures net neutrality by amending the Communications Act of 1934 which regulates common carriers. Someone has to because corporations won’t.