Federal Communications Commission

USF Reform: We’re All In This Together

August 10th, 2010 by Carol Mattey - Deputy Chief, Wireline Competition Bureau

We are busy at the FCC developing proposals to reform key aspects of the universal service fund.  I’ve been fortunate in recent weeks to be able to travel outside of D.C. with several FCC colleagues to listen and learn from a broad cross section of stakeholders that share a common goal of promoting innovation and investment in broadband across America.  I attended the NARUC Summer Meetings in Sacramento, where I participated in several panels, including a discussion of the National Broadband Plan and its USF recommendations and a discussion of the regulatory framework for broadband services. Our colleagues at state public utility commissions have a keen interest in what’s going on in Washington, DC and how the FCC’s actions might impact citizens in their states.  

We also spoke with rural telephone companies at the OPASTCO summer meeting.  Several of the companies we talked to have deployed all fiber networks throughout their service areas offering, while others are in the process of building out their networks.  The companies we spoke with typically offer three to five tiers of service, with overall take rates ranging from 20% to 70% and many customers purchasing the lower priced, lower speed packages offering 1.5 Mbps to 3 Mbps downstream. 

The Washington Department of Information Services hosted a jam packed day of meetings with Tribal government leaders and local officials (including representatives from school districts, the City of Seattle, the Washington State Library, the Department of Social and Health Services, the Department of Commerce, Noanet, Public Utility Districts, and many others), who are working hard to maximize the availability and use of broadband in their communities to advance health care, education, and economic development. State and local officials were eager to discuss the challenges of extending broadband to particular isolated communities in the Washington State. 

We learned about a not-for-profit health center that has raised matching funding to establish a critical access health care facility on the San Juan Islands that would enable health care professionals to treat patients through live imaging delivered via broadband, rather than transporting people to the mainland via helicopter or ferry.   The Colville Tribe talked about how they are hoping to receive stimulus funding to extend broadband on their reservation so that their people can find new ways to learn a living in the wake of high unemployment after the closure of timber mills that sustained the community for so many years.  Noanet – which has received $85 million in round one of stimulus funding and has another $55 million in projects in due diligence – highlighted for us on a map where they will be extending middle mile facilities in the state.  We heard about how broadband enables areas of the state that historically have survived on tourism to develop a cottage industry of software developers and others who remotely provide digital efforts for the movie industry.  We also spoke with the Gates Foundation about their ongoing commitment to improving public access to broadband in libraries across the country.

We recognize the magnitude of the task and know that it’s too great for the FCC to accomplish on its own.  I’m convinced that we have to work closely with our state, local and Tribal government partners, as well as the private sector and non-profits, in discussing how to reform USF to advance broadband for local communities. They know what’s on the ground.  We’re all in this together.

3 Responses to “USF Reform: We’re All In This Together”

  1. Person is on dial-up says:

    I have a question about the rural phone companies in the meeting was Verizon in that meeting?

    Were I am verizon has not think about laying FiOS line were I am which they competely stopped sometime and there are more Houses then DSL hub slots. I have waited over 10 months for a slot to open up and nothing still and I am on the wait list thing. In 10 months even verizon has done nothing in my area to even upgrade or even adding an extra DSL Hubs. I live less then 50feet by fiber line which may be Verizon fiber and my area is not zoned for FiOS. I am starting to give up on Verizon and started waiting for 4G from somebody like sprint.

    My area is considered a Rural development and it has expanded with residents in just the 10 months I have been here but it is starting to slow for the reason tha.t all you can get is dial-up and people want to move more were High-Speed internet is. The libary does not have WiFi even only lab computers and when there DSL line is at full load with all computers being used it fills like I am on 56K. My Boost phone is faster then the internet at home or at the libary.

  2. Guest says:

    Wasnt the National Broadband Plan supposed to have proposals for USF reform? The Chairman and Levin promised a specific plan. and yet, you say you are now (still) working on a plan. When will there be any action on this or any other topic? This is incredible.

  3. One of the 3% says:

    You point to several worthy projects and goals regarding the use of broadband technology. The USF funds have been targeted towards network investment and deployment in high cost areas of the country. Many of the projects mentioned in your article are outside of infrastructure build-out cost and support which USF has been targeted.

    One issue mentioned is education such as educating customers on the Internet and its uses. Doesn't this ideal fall under the edcuation community, schools, community colleges and universities? Aren't there funding mechanisms in place to fund these programs today. Why would USF funds be directed to this function which should be met through current educational funding?

    Healthcare is also a worthy cause, and leveraging physician knowledge through technology to remote rural areas is also an excellent goal, but redirecting USF infrustructure funding to build separate dedicated fiber networks is short sited to the reality of the true cost of operating and maintaining those networks.

    Economic Development is ultimately driven by private investment. Redirecting USF funds to government owned networks, be it for edcuation or healthcare will not result in long term economic development.

    Government competition with private industry will result in a lower quality of service, rising costs to consumers who remain on the private networks and a true cost that is ultimately paid for by all tax payers in rising taxes and governemtn fees.

    Redirecting the purpose of the USF funds away from infrastructure investment to fund programs in other government sectors will not increase broadband deployment, but will slow it.

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