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FCC plans to redirect phone subsidies to broadband

Grant Gross | Feb. 7, 2011
The U.S. Federal Communications Commission will unveil a proposal Tuesday to phase out subsidies for traditional telephone service to rural areas, with the money transferred to a broadband deployment program.

The notice of proposed rulemaking, or NPRM, is an early step in the FCC's efforts to revamp USF. In an NPRM, the FCC makes proposals and asks for public comment on them.

Several groups, including the Organization for the Promotion and Advancement of Small Telecommunications Companies (OPASTCO), a trade group representing rural telecom carriers, praised the FCC efforts. OPASTCO members will be concerned about continued funding as the program transitions to broadband, said OPASTCO President John Rose.

"OPASTCO members ... appreciate the FCC's efforts to move forward with modernizing the high-cost USF program and intercarrier compensation rules," Rose said. "In order for rural consumers to have ongoing access to modern broadband service at reasonable rates, the stability of these critical sources of network cost recovery for small, rural carriers is essential."

Verizon Communications and USTelecom, another telecom trade group, also praised Genachowki's plans.

"Today's remarks by the chairman lay out a good road map for policymakers and the communications industry to work together to put in place updated policies that ensure all Americans have access to broadband networks and the Internet," Kathleen Grillo, Verizon's senior vice president for federal regulatory affairs, said in a statement.

 

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