The Federal Communications Commission has agreed to give rural telecoms an additional $1.7 billion in funding as it shifts the Universal Service Fund from traditional phone to broadband service, the agency said Wednesday. The FCC hopes the funds will help provide broadband service for an additional 8.5 million people.
Converting the Universal Service Fund to a broadband account is one of the most crucial steps the government must take to help small businesses benefit from high-speed Internet service, FCC Chairman Julius Genachowski told the Senate Small Business Committee on Tuesday. He believes the economy can get a boost from mobile broadband.
Rural telecoms, in their comments to the FCC about a National Broadband Plan, said ISPs should contribute to the Universal Service Fund, which would subsidize the network buildout. The FCC is trying to determine the exact meaning of the term "broadband."
The FCC may at some point in the near future require VoIP providers that use public-switched phone networks to pay into the Universal Service Fund. Many big VoIP providers such as Vonage already impose charges linked to the USF, but smaller providers have been able to avoid the fees because the FCC hasn't clarified the issue.
Major technological changes are placing new strains on the nation's Universal Service Fund. The debate over whether to revise the USF model is expected to heat up in coming months as lawmakers mull possible changes to the Telecommunications Act of 1996.