FCC Ready to Transform USF Away From Voice Subsidies

The FCC on Wednesday made good on its vision to start transforming the Universal Service Fund (USF) from a wireline voice subsidy to one meant to support broadband build-outs throughout the country.

Commissioners voted to begin taking public comment on the change, the first step in what promises to be a months- or years-long process of reforming the bloated, inefficient USF. The decision comes as Congress deliberates over the recommendations made by the FCC in the recent national broadband plan; suggestions include overhauling the USF in a way that does not unnecessarily burden consumers, and the FCC can spearhead the movement without waiting for lawmakers’ input.

To wit, the FCC wants to create a Connect America Fund (CAF) to replace the high-cost portion of the USF. The CAF would support broadband services, not voice, without increasing the size of the USF past current projections, the agency said. In specific, commissioners want to know how to entice service providers to deploy broadband in expensive regions that may not guarantee a return on the investment. FCC leaders also want ideas for getting broadband to unserved areas right away even as the CAF undergoes full implementation.

Further, the FCC wants to cap the size of the high-cost part of the USF at 2010 levels; re-examine regulations for certain smaller carriers; and phase out support for multiple competitors in areas where the market can’t even support one provider.

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