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Nov. 27, 2007

The Joint Federal-State Board that oversees the USF (Universal Service Fund) unanimously supports a plan to divide the fund into three seperate parts.

It would also include one that would help fund the building of wireless broadband networks in rural areas.

The Board's proposal has been approved by the FCC and will provide a framework for newer and more specific fund regulations.

The Joint Board includes FCC Chairman Kevin Martin and two other FCC commissioners, state-utility regulators and a consumer advocate.

The fund comes from charges to consumers via their telecom bills and was originally enacted to ensure advanced telecom service and Internet access to schools and libraries.

Since then, wireless providers have been beneficiaries of the fund, receiving up to $1 billion a year to help build out wireless networks in rural areas.

However, the Board's new proposal would not eliminate that function of the fund, though it will cap the amount of money carriers can receive.

The proposal formally portions the fund into three parts: one part to help pay for high-speed Internet service; a second portion for subsidizing wireless services in rural areas; and a third as a "last resort" for landline telecom providers.

The new proposal caps the total amount of money the fund could distribute to companies at $4.5 billion a year, a sum the board expects the fund to distribute this year.

Overall, a balance of about $2.5 billion would be spent on ensuring high-speed Internet connections for schools and libraries.

The proposal also suggests that states administer the funds, rather than the FCC, and suggests that eventually the fund only subsidize one company for broadband, wireless and wired service in any given area.

Currently, multiple companies can apply for grants, which some critics of the fund have said drive up the cost of the fund.

Martin said "for its part, Congress didn't envision that services supported by universal service would remain static."

"Instead, it views universal service as an evolving level of communications services. A modern and high-quality communications infrastructure is essential to ensure that all Americans, including those residing in rural communities, have access to the economic, educational and health care opportunities available on the network," added Martin.

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Source: Wireless Week