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FCC's broadband investment plans encounter opposition

By Donna Donnawitz
August 8, 2012
The Federal Communications Commission (FCC) has relied on the Universal Service Fund (USF) for more than a decade to help generate equitable funding for telecommunication projects around the country. The framework essentially imposes a small fee on service providers that ensures schools, hospitals, libraries and other public institutions have reliable access to the latest communications technologies. Alternatively, the USF also ensures that telecommunication providers have adequate economic incentive to set up operations and deliver services to rural areas.

According to Houston Chronicle contributor and former South Dakota Senator Byron Dorgan, the FCC has been proposing several amendments to USF policy that could dovetail with separate telecommunications initiatives. Most notably, the agency is looking to allocate investment toward its new Connect America Fund (CAF), a project intended to support the extension of high-speed broadband networks to all corners of the country.

The USF has certainly laid the foundation for some important breakthroughs, according to Dorgan, with formerly isolated regions receiving access to converged voice and data networks that facilitate video streaming and other advanced capabilities. And it would seem that the CAF would only further progress.

But unfortunately, it appears that rural carriers may see their USF financing evaporate in the process as a result of the new policies. If that were to happen, economic uncertainties could give providers pause before launching into long-term network upgrades.

"These new rules have essentially frozen new investment and new jobs in rural broadband networks because other rural carriers, seeing the problems the FCC has already caused, understandably don't want to make investments when they may never be able to recover their costs," Dorgan wrote.

The Fiber-to-the-Home (FTTH) Council has raised similar concerns in comments submitted to the FCC. In its view, imposing a fee on broadband internet access, particularly one that increases in step with performance capabilities, would be a misguided way to reform USF rules. Aside from "chilling" private investment in this area, higher prices could very well stop consumers from upgrading to the advanced network services the FCC is hoping to provide.

According to Broadcasting & Cable, one potential workaround being advocated by Google is to design the rules in such a way that only leading internet service providers, and not the smaller, independent telecommunication service providers, would be making contributions to the new fund. Not surprisingly, the company was also quick to suggest that "innovative internet applications and services" should be held out of the contribution base on the grounds that it could undermine the significant social and economic benefits created by cutting-edge inventions.

Perle has an extensive range of Managed and Unmanaged Fiber Media Converters to extended copper-based Ethernet equipment over a fiber optic link, multimode to multimode and multimode to single mode fiber up to 160km.


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