FCC Takes Another Step to Reform Universal Service Fund

WASHINGTON, April 22, 2010 – The Federal Communications Commission has kicked off its latest efforts to reform the much-maligned Universal Service Fund, which was created to help bring communications services to all Americans.

In the agency’s National Broadband Plan released last month, the FCC stated its intent to transform the USF from supporting networks providing plain old telephone services into a more efficient tool for making affordable, high-speed broadband available to all Americans.

The FCC this week is asking for public comment on the transformation of the fund, including its plan for creating a Connect America Fund, which would directly support broadband without increasing the size of the USF.

Through its “notice of proposed rulemaking” and its “notice of inquiry,” the agency hopes to foster more dialogue on an economic model to precisely target support for areas where there is no private-sector business case for carriers to provide broadband and voice services.

It also wants to hear thoughts on proposals to cut legacy universal spending in high-cost areas and to shift support to broadband communications.

“This proceeding will lay the groundwork for a system that provides universal service support for broadband and voice services in an efficient and targeted manner,” said FCC Chairman Julius Genachowski in a statement. “The comprehensive universal service reform that the National Broadband Plan envisions will take time, but cannot take too long. We do not want flash cuts. We want a reasonably paced and certain approach to converting universal service to broadband communications.”