FCC plans to use the USF for rural broadband

In a Tuesday meeting, Federal Communications Commission Chairman Julius Genachowski is expected to outline the agency's plan to use the Universal Service Fund to subsidize broadband deployment in rural areas. The USF currently "subsidizes phone lines in rural areas and for low-income Americans" and "also pays for discounted Internet connections for schools and libraries," Amy Schatz of The Wall Street Journal reports. "While the world has changed around it, USF — in too many ways — has stood still, and even moved backwards," Genachowski is expected to say in a speech Monday, according to an advance copy provided by FCC staff to the WSJ.

We reported in January that the plan to use USF for broadband subsidies has been met with some resistance from rural telecommunication companies but some of those fears have been overstated. "There has been broad bipartisan support at the FCC and in Congress about the need to change the fund, but disagreements persist over how to do it," Schatz writes. "Periodic efforts to revamp the program, which was established in the mid-1990s, have failed as phone companies that risked losing funding fought the cuts." While not providing any details, FCC officials have suggested that changes in the USF formula need to be made, but the agency isn't expected to take up that issue until later this year, Schatz reports. (Read more)