FCC Pushes For Universal Broadband Access

Julius Genachowski, chairman of the Federal Communications Commission, speaks to host Melissa Block about plans to convert the $8 billion federal program that provides phone service to rural areas. Under the proposal, that money would be used to provide broadband Internet to underserved areas.

ROBERT SIEGEL, host:

This is ALL THINGS CONSIDERED from NPR News. I'm Robert Siegel.

MELISSA BLOCK, host:

And I'm Melissa Block.

If you look at your phone bill, you might notice a fee tacked on for something called the Universal Service Fund. That surcharge is used to help connect underserved parts of America, mostly rural, with phone service.

Well, now the Federal Communications Commission is starting work on a plan to convert that $8 billion fund. Instead of subsidizing phone service, it would instead help provide broadband Internet to underserved areas.

And FCC chairman Julius Genachowski joins me to explain. Why don't you make your pitch, Chairman Genachowski? Why the need for change?

Mr. JULIUS GENACHOWSKI (Chairman of the Federal Communications Commission): Well, broadband, high-speed Internet, is our communications platform of the future. It's how jobs will be created, what we need to lead the world in innovation, what will attract private investment, and that's true around the country.

We did a good job in the 20th century extending telephone service to all of America, including parts of America where the economics don't support telephone service. That program still wakes up every day and supports telephone service. We need to modernize it to support the next-generation communications medium: high-speed Internet.

We also need to streamline it because the program's gotten wasteful, and so we need to both modernize and streamline the program so that it's meeting our 21st-century communications needs.

BLOCK: There are some concerns that the Universal Service Fund now has been used in ways that are not efficient, that are very wasteful. Can you give us an example?

Mr. GENACHOWSKI: Absolutely. And we have to take care of these challenges. And there are some parts of the country where the fund is paying up to $20,000 a year to support telephone service.

BLOCK: You mean $20,000 to connect one phone line to one house?

Mr. GENACHOWSKI: That's right. There are communities in the country where the fund is supporting four or five or six different companies, providing telephone service. That doesn't make any sense.

There are elements of the current program that are disincentivizing companies from moving from analog to digital IP networks because they're worried if they make that move, they'll lose money under the program. Well, that doesn't make any sense.

So we need to tackle the inefficiencies in the program, tackle the waste, tackle the accumulation of policies that I'm sure were well-intentioned when they were adopted but that don't make sense anymore and make sure that this is a targeted, efficient program that's using market-driven means to allocate funding only where it's necessary.

BLOCK: Would the idea in this be that there would be, eventually, no more money in this plan for rural phone service? So if I'm a rural phone service company, I would be looking at this with some degree of concern.

Mr. GENACHOWSKI: Well, the rural telephone companies understand that they need to be in the business of being rural Internet access companies. And so what a well-done program here will do is help those companies in rural areas make the transition from being 20th-century telephone companies to being 21st-century Internet access companies, wired or wireless.

So change is hard, and we've said that as we do this, we don't want to have flash cuts that create a necessary disruption. It's reasonable to have a transition path for changes of the sort we're contemplating, but it needs to be a certain transition path so that at the end of it, the funding from the program goes to companies that are providing broadband service, not telephone service.

BLOCK: Have you heard from people directly as you've been thinking about this, this transition from phone to broadband, hearing from people out in the country, in areas where the telecoms just haven't reached?

Mr. GENACHOWSKI: Oh, absolutely. I was in West Virginia a couple of months ago, and I had an experience there that is unfortunately common in many rural parts of the country, where I talked to individual citizens and small business owners who were in areas, their homes or their businesses, where they didn't have high-speed Internet access, either wired or wireless, but they lived, or their businesses were located, right near areas that did.

And it's incredibly frustrating, and it was a vivid example of the imperfect way that the current system is operated.

BLOCK: Julius Genachowski is chairman of the Federal Communications Commission. Thanks very much for talking with us.

Mr. GENACHOWSKI: Thanks, Melissa.

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