Editor’s note: The Broadband Report is a regular feature in WRALTechWire on Mondays and as news breaks.
WASHINGTON, D.C. – The Federal Communications Commission last week took significant steps toward implementing the next phase of its program for expanding robust broadband in rural America, the Connect America Fund (CAF).
Phase I of the CAF already has invested more than $438 million to deploy broadband service to 1.6 million previously unserved Americans. Phase I also invested $300 million to expand advanced mobile wireless service and nearly $50 million for better mobile voice and broadband on tribal lands.
The FCC transformed the previously-existing Universal Service Fund and Intercarrier Compensation systems into the CAF last year to accelerate broadband build-outs to Americans in rural areas.
In North Carolina, according to FCC documents, 35,472 total locations were noted with approximately $20,950,161 in total dollar support for in the first round of the CAF. The carriers listed in the documentation provided last September included ACS, AT&T, CenturyLink, FairPoint, Frontier, Hawaiian, PRTC, and Windstream. View FCC map.
Phase II the Connect America Fund will result in a nearly 70 percent increase in annual support for broadband and voice service in areas served by the nation’s largest traditional local providers – known as “price cap” carriers.
The effort will expand broadband access to an additional five million Americans who are currently unable to benefit from the opportunities of 21st century communications. Over five years, Phase II of the CAF will provide nearly $9 billion to expand broadband in rural areas.
These recent actions by the FCC are focused on updating the program to ensure that the best possible voice and broadband experiences are being delivered to rural America within the confines of the CAF budget, while also providing increased certainty and predictability for all carriers as well as a climate for increased broadband expansion.
For example, because 98 percent of the population in urban areas has access to fixed broadband at speeds of 10 Mbps or more, among the proposals being explored is whether to more than double the download speed required for subsidized broadband networks, from 4 Mbps to 10 Mbps. This is one of several areas in which the FCC seeks to ensure consumers receive the same quality service regardless of where they live.
In addition, because there has been rapid private-sector expansion of 4G LTE mobile broadband service since 2011, the FCC is exploring whether to re-target Mobility Fund Phase II support to ensure the continued deployment and preservation of 4G LTE mobile broadband service in areas that otherwise would not have such service.
The concept of targeting subsidies for broadband and voice service to pockets of rural America where they are needed most is central to the FCC’s 2011 reforms.
Later this year, “price cap” carriers will be given the opportunity to accept CAF support in high-cost areas based on detailed local cost estimates. Incumbent carriers must choose to accept or decline the offer of support. If they decline, the subsidies will be made available to other providers, awarded through a Phase II competitive bidding process.
The FCC’s unanimous 2011 reforms aimed to make the universal service fund fairer for all consumers and businesses, which pay for the fund through fees on phone service. Among reforms to improve fiscal responsibility was the phase-out of excessive subsidies by the FCC that allowed some rural companies to charge rates vastly lower than those paid by the average consumer despite where they lived. The FCC said they agreed to ease the impact of these changes for customers of companies receiving excessive subsidies by delaying the rule until January 2015.
