Some rural telecommunications providers worry about a newly proposed Federal Communications Commission initiative to overhaul an $8 billion subsidy program for land-line telephone services to fund expansion of broadband. The Universal Service Fund now supports phone services to schools, libraries, the poor and high-cost areas, and is financed by long-distance phone call charges paid to local carriers. It also subsidizes smaller telecommunications companies that provide services in rural areas.
Todd Shields of Bloomberg Businessweek reports that rural telecoms wonder if the new FCC plan will strengthen or weaken their networks. Jeffrey Silva of Medley Global Advisors in Washington told Shields that rural carriers face the greatest risk from the reforms, so their inclusion in the process is essential to passage. David Mitchell, an economic researcher at Missouri State University, told Shields that big outfits like AT&T and Verizon would be "the winners" under the plan because they would absorb small carriers that would not be able to afford the changes necessary to become broadband providers.
An estimated 14 to 24 million people don't have high-speed Internet access. Shields reports that FCC Chairman Julius Genachowski wants to increase access from 65 percent to 90 percent because "broadband has gone from being a luxury to a necessity for full participation in our economy and society." The subsidy program overhaul would decrease fees paid to connect long-distance calls, which Genachowski said would reduce costs for rural phone service. A group of telephone companies led by AT&T asked the FCC in July to reduce these costs; the proposals will be brought before the FCC Oct. 27. (Read more)
Todd Shields of Bloomberg Businessweek reports that rural telecoms wonder if the new FCC plan will strengthen or weaken their networks. Jeffrey Silva of Medley Global Advisors in Washington told Shields that rural carriers face the greatest risk from the reforms, so their inclusion in the process is essential to passage. David Mitchell, an economic researcher at Missouri State University, told Shields that big outfits like AT&T and Verizon would be "the winners" under the plan because they would absorb small carriers that would not be able to afford the changes necessary to become broadband providers.
An estimated 14 to 24 million people don't have high-speed Internet access. Shields reports that FCC Chairman Julius Genachowski wants to increase access from 65 percent to 90 percent because "broadband has gone from being a luxury to a necessity for full participation in our economy and society." The subsidy program overhaul would decrease fees paid to connect long-distance calls, which Genachowski said would reduce costs for rural phone service. A group of telephone companies led by AT&T asked the FCC in July to reduce these costs; the proposals will be brought before the FCC Oct. 27. (Read more)
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