Earlier this month the FCC unveiled their "Connect America" plan, aimed at shifting Universal Service Fund subsidies away from rural phone service and toward rural broadband expansion. The problem so far has been the government hasn't truly addressed the historical problems the $25 billion fund has had with waste and fraud.

As we noted at the time, the FCC's plan was painfully sparse on hard details, though it was believed the FCC's plan would in no-small-part mirror a plan put forth by large telco lobbyists. That plan redirected the lion's share of these funds toward larger phone companies, and away from smaller telcos, WISPS, or cable operators.

Today the FCC voted unanimously to approve the full plan, which has yet to be made public. According to an FCC statement, the new plan will create a new Connect America Fund with an annual budget "of no more than $4.5 billion," tasked with expanding broadband to roughly 7 million currently unserved U.S. residents. Earlier this month we noted that the plan would likely involve a raised cap on the amount ISPs can charge you via the USF. How much more you'll be paying again isn't entirely clear, but the FCC insists that for every dollar put into the fund, consumers will see three dollars in benefits:

As part of this reform, some consumers may pay, on average, an additional 10 to 15 cents a month on their bills; but for every dollar in cost, reform will provide $3 in benefits for consumers. And no additional charges can be imposed on consumer phone bills that are at or above $30 a month (inclusive of most fees consumers pay on their bills), nor can such charges be imposed on low-income consumers served by the FCC's Lifeline program. Any new charges will begin to decline after six years.

A large part of the new rules will involve cracking down on "traffic pumping," a practice that has cost larger phone companies significant additional income over the years. According to the FCC they'll also be creating a new "mobility fund" that delivers $500,000 per year to help expand mobile broadband services, a total the wireless industry immediately decried as insufficient:

While the FCC is to be commended for its establishment of a dedicated Mobility Fund and making significant funds potentially available through 2014, the decision to set the long-term funding-level for mobile services at only 11 percent of the high cost fund is troubling.

The FCC insists that over the next six years the plan will create 500,000 new jobs, improve economic growth by $50 billion, while saving consumers $2 billion annually (a number that has magically risen $1 billion since the FCC presentation earlier this month). The FCC has yet to show their work for any of this math. The agency is also promising they'll "demand accountability" from ISPs when it comes to fund use, something that has been lacking in the e-rate and USF programs.

The problem, as we've mentioned many times before, is that taxpayers have doled out billions in direct subsidies and other tax benefits to these companies over the last few decades. The total subsidies could easily have delivered fiber to the home and LTE service to every U.S. resident several times over, but what taxpayers got in exchange for these handouts was empty promises, libraries that lack adequate bandwidth and a lot of scandal, fraud and waste. Why many of these companies, particularly larger operators like AT&T and Verizon, are getting a single additional cent in subsidies remains painfully unclear.
read comment(s)

Original story here.

Tags: broadband, fcc statement, fraud, income consumers, lifeline program, PHONE, service, three dollars, universal service fund, waste

Posted in News
No Comments Yet Posted by Don