Federal Communications Commission

Connecting Rural Americans to Broadband

May 7th, 2010 by Carol Mattey - Deputy Chief, Wireline Competition Bureau

As I travel throughout the country to talk about the National Broadband Plan, I am proud to highlight the Plan’s recommendations to connect consumers in rural America to broadband.  The Plan’s proposals for connecting unserved parts of rural America are at once concrete and specific as well as bold and visionary. I talked about them at length in recent speeches, but I’m going to hit some of the key points in this blog.

The Plan made clear that broadband communications is critical to jobs, health, education, news, information and more in the 21st Century.  In the last century, the federal Universal Service Fund was key to connecting sparsely populated rural communities to the communications technology of that century: telephone service.  Now, we must reconfigure the fund to support broadband.  Doing nothing, and leaving many communities without access to broadband, is not an option.

The Plan sets forth a vision to accomplish that goal.  In particular, the Plan outlines ways to transform the primary fund for supporting voice service in rural America – the High Cost Fund – into a “Connect America Fund” that explicitly and efficiently supports broadband networks capable of providing high-quality voice services.  The Plan proposes to target support more effectively to bring broadband to consumers in unserved areas and sustain service in areas that need ongoing universal service subsidies.

Implementing the Plan calls for tough choices and careful balancing of costs and benefits.  It is critical to the preservation and continued success of universal service that we find the right balance between funding the program adequately and not unduly burdening consumers

Consumers now pay the highest USF fees ever on their landline, cell phone and cable voice bills to support the fund, and the growth in fees must stop. To minimize the burden on consumers, the Commission is looking at ways to limit growth in the fund.  One way to contain growth is to make sure that consumers who fund the program get the most “bang for the buck” with support under the new Connect America Fund provided in a way that encourages efficiency. 

The growth of broadband and competition has fundamentally changed the business model for many communications companies.  The majority of states have moved from rate-of-return regulation, which compensates carriers for their actual costs regardless of whether there is a cheaper way to serve the customer, to incentive regulation, which encourages efficiency and enables providers to reap the rewards of an efficient network.  Isn’t it time at the federal level to think about how we need to adapt how we regulate those smaller companies? 

The Plan also analyzed consumer usage of broadband speeds to set an initial target of 4 Mbps of actual download speed and 1 Mbps of actual upload speed.  The 4 Mbps is comparable to the median speed received by residential consumers today, and what many consumers are likely to use in the near term, given past growth rates. To ensure that consumers in rural areas receive broadband speeds comparable to urban areas, the Plan also recommends reevaluating this 4 Mbps funding target every four years and adjusting it as appropriate to reflect changing consumer use and demand.  Doing so will ensure that there is no digital divide in this country.

There’s plenty of work ahead to flesh out the details.  The Plan presents an opportunity not only for rural consumers, but also for companies operating in a rural America to chart a new course for the future.  To complete the task, we need more information from the industry and look forward to a collaborative process with providers.  Our goal is to bring broadband to all rural Americans without breaking the bank.  Help us figure out the best way to get there.

Read the prepared text of Carrol's speeches:

2 Responses to “Connecting Rural Americans to Broadband”

  1. A Rural Resident says:

    I moved to a rural area with limited broadband available and after I got settled the small amount of broadband slots got fill so I had to go to Dial-up. I can't afford near $80 for 1.5Mbps and 17GB download a month from Wildblue because what I need to do is very broadband heavy then in the house has other stuff that takes broadband so the 17GB cab out max out in middle of the month then I would be locked into a 24 month contract. for what I need I have to have eaither ADSL or 4G. I tried to make a web cache proxy server on lan and in 1 week I had to take offline because it filled the hard drive of the server.

  2. Zach Thomas says:

    I as well as 100's in my area do not have even one broadband provider. i would propose that allowing smaller fixed wireless companies for little to nothing be allowed to temporarily, until fiber or cable services can be run, get access to any and all providers Towers to provide fixed wireless service. Every one can look out their window or front door and see a cell Tower or local communications Tower but small providers can't afford the rental fee's to get on those towers. I live in a rural housing development that never got finished and the builder never followed through on getting a cable provider to ours and others homes. A local wireless/fiber company is trying to find a Tower that they can get on to provide us broadband but most of the towers are owned by Cell companies and even the local state Towers which are much smaller and further away want to charge per month. Please help us in Rural America. thank you

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