For example, the FCC intends to redirect the Universal Service Fund (USF) introduced in 1997 to ensure that Americans had universal access to voice communications. As of early 2011, USF fees were equivalent to 15.5 percent of each U.S. telecom company's interstate and end-user revenues.
Given that USF has long since succeeded in fostering the availability of voice services across the U.S., the FCC is shifting the nation's universal connectivity commitment to broadband, said FCC Chairman Julius Genachowski.
"We are taking a system designed for the Alexander Graham Bell era of rotary telephones and modernizing it for the era of Steve Jobs and the Internet future he imagined," Genachowski said.
Financial Incentives For Carriers
The FCC aims to provide the nation's broadband service providers with the requisite financial incentives for extending their infrastructures to accommodate the needs of 7 million rural Americans without broadband access today. However, participating carriers must demonstrate they are deploying a full range of broadband capabilities to currently unserved customers.
For example, the new Connect America Fund benchmarks require service operators to deliver actual broadband speeds of at least 4 megabits per second downstream and 1 Mbps upstream. Furthermore, the monthly usage capacity available to consumers must be reasonably comparable to the services delivered to residential terrestrial fixed broadband networks in urban areas. In addition, the network's latency performance must be able to support real-time applications and services such as VoIP.
The availability of high-speed broadband within currently unserved parts of the nation is expected to lead to the creation of 500,000 new jobs over the next six years.
"We estimate that the [new initiative] as a whole will unleash billions in private-sector broadband infrastructure spending in rural America over the next decade," Genachowski said.
A New Mobility Fund
Another important aim of the FCC's new plan is to empower small businesses that otherwise couldn't exist in the small towns scattered throughout rural America, and as a result to create additional job opportunities within their communities.
"By empowering millions more Americans to engage in e-commerce --- as buyers and sellers --- the [new initiative] will grow the size of our overall online marketplace and provide a boost for Main Street businesses across the country, Genachowski said.
The FCC's initiative also includes a new mobility fund for expanding the availability of mobile broadband services nationwide.
"Over the next three years, we will provide almost $1 billion in funding per year for universal mobility," Genachowski said. "We are also extending the benefits of mobile broadband coverage to tens of thousands of unserved road-miles, areas where millions of Americans work, live, and travel."
Due to the reforms introduced by the FCC Thursday, however, some consumers may have to pay a monthly access recovery charge (ARC) of 10 to 15 cents, on average. On the other hand, "consumers already paying local phone rates of $30 or more cannot be charged the ARC," said Commissioner Michael Copps.
Still, consumer watchdog groups are worried about the new plan's impact on U.S. consumers.
"We share the concerns of other consumer organizations that the commission's actions will lead to higher prices at a time when the average American is watching every penny," said Public Knowledge President Gigi Sohn.
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