The FCC unanimously approved USF reform rules in a push to expand broadband coverage to communities most in need
The Federal Communications Commission approved what it’s calling modernization and reform of its universal service program in a rare unanimous vote.
The FCC said the program will provide approximately $20 billion in support over the next 10 years to “small rural carriers” offering broadband services in “high-cost areas.” The government agency said the reforms will better target financial support “to communities that need it the most,” with claims that around 20% of all homes in areas served by “rate-of-return” carriers still lack access to broadband services.
The FCC moves include modernizing existing Universal Service program rules to encourage investment by rural carriers by providing greater capital expenditure allowances for operators with below average deployment and limiting allowable investment for those with above average deployment; require broadband deployment, based on number of locations lacking service, the cost of providing service and support to be received; and directs Universal Service funds to areas without broadband competition.
For carriers, the FCC is also offering a voluntarily transition from legacy rate-of-return support to a new model-based support similar to a model used for the Connect America Fund Phase II. Carriers accepting USF support must deploy service providing download speeds of at least 10 megabits per second and upload speeds of at least 1 Mbps to all funded locations, with faster 25 Mbps downlink and 3 Mbps uplink service required in areas of higher population density; with a 40% build out requirement within four years, increasing by 10% each year until reaching 100% by year 10. The plan also looks to reform the existing Interstate Common Line support mechanism to provide support for stand-alone broadband, now known as the Connect America Fund Broadband Loop support.
In a move to reign in cost concerns, the FCC also said USF reform is set to reduce the allowable rate-of-return from the current 11.25% to 9.75%, which it said reflects current market conditions, with a phased transition; limits operational and capital expenditures to help target support to areas with less broadband deployment; and has an enforceable $2 billion budget. The FCC added it’s also seeking comment on additional measures to prevent carriers from billing either the USF or their customers for “inappropriate expenses, such as artwork and corporate jets,” and comment on measures to increase broadband deployment on tribal lands.
“These reforms will help to ensure that federal universal service funds are spent wisely, for their intended purpose and takes concrete steps to bring broadband to those rural Americans who remain unserved today,” noted FCC Chairman Tom Wheeler in a statement.
Bored? Why not follow me on Twitter
Photo copyright: pinkbadger / 123RF Stock Photo
