FCC Chairman Julius Genachowski’s Proposal to Reform USF

The FCC Chairman just finished a speech outlining, in the broadest of strokes, a proposed rule his office is circulating that would reform parts of the federal Universal Service Fund and the related intercarrier compensation program.  The Chairman began by outlining various and compelling reasons as to why the USF needs to be transitioned to support universal broadband deployment in the U.S., and much of those benefits (unsurprisingly) hinged on the economy and jobs.

He also made the point that broadband has gone from a “luxury to a necessity for full participation in our economy and society.”  Throughout the Chairman’s speech, he stressed that the over-riding goal in USF reform, his office’s work, and this proposal was the elimination of negative impacts of the current system on consumers, and an increase in consumer benefits moving forward.

While we’re still analyzing key elements of the proposal, we know that the Chairman noted that the core of his proposal mirrors what the FCC proposed in the National Broadband Plan. Today’s proposal creates the Connect America Fund, which will transition some of the current USF’s high-cost fund to pay for broadband deployment; it creates a Mobility Fund to pay for wireless broadband deployment; and the proposal begins an overhaul of intercarrier compensation (the Chairman noted that his proposal will not penalize states which have already reformed telephone access charges). The Chairman also stressed that state governments will retain a key role in the new USF, and that there will be dedicated funding for tribal lands.

More to come as we assess the details of the Chairman’s proposal, and as we track what will surely be widely varied reactions from interested parties.

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