FCC creates $4.5 billion Internet fund for ‘era of Steve Jobs’

“Regulators approved a $4.5 billion subsidy for extending high-speed Internet service to an estimated 18 million Americans who lack broadband access,” Bloomberg reports. “The Federal Communications Commission voted 4-to-0 yesterday to accept Chairman Julius Genachowski’s proposal to overhaul a program that has been devoted to building telephone connections in places where it’s expensive to supply service.”

“‘We are taking a system designed for the Alexander Graham Bell era of rotary telephones and modernizing it for the era of Steve Jobs and the Internet future he imagined,’ Genachowski said before the vote at an agency meeting in Washington,” Bloomberg reports. “In the same vote, the FCC lowered the rates that companies charge to connect calls. Together the moves are designed to restructure support for rural companies and relieve pressure on the Universal Service Fund, a broader subsidy program that is financed through a charge on consumers’ long-distance calls.”

“AT&T Inc., the largest U.S. phone company, and Verizon Communications Inc., the second-biggest, are likely to benefit from paying less to connect calls outside their service areas, Washington-based David Kaut and Christopher King in Baltimore, analysts with Stifel Nicolaus & Co., said in a note yesterday,” Bloomberg reports. “The order gives incumbent phone companies ‘an unwarranted advantage for broadband support,’ Michael Powell, president of the National Cable & Telecommunications Association and a former FCC chairman, said in an e-mailed statement yesterday. Members of the Washington-based group include Comcast Corp., the largest U.S. cable company, and No. 2 Time Warner Cable Inc.”

Bloomberg reports, “The FCC’s order lets companies levy a new charge on phone subscribers, Joel Kelsey, Washington-based political adviser for Free Press, a Florence, Massachusetts-based policy group, said in an e-mail yesterday. The vote won’t lead to higher bills, said FCC Commissioner Robert McDowell, a Republican. ‘For the vast majority of consumers, rates should decline or stay the same,”’ McDowell said.”

Read more in the full article here.

[Attribution: IBTimes. Thanks to MacDailyNews Reader “krquet” for the heads up.]


    1. You and many of the commenters below obviously don’t live in a rural area.

      I have friends that have no Internet option except dial-up or expensive satellite. At least there is competition in satellite TV.

      For that matter, I know of towns in my area where even in the central business district (and these are thriving, not dying towns) there is no cell phone coverage.

      These actions by the FCC are extremely appropriate.

      Stop being an urban elitist and get out and experience the rest of the world.

    1. Not sure if it’s true or not, but according to the article: “The new plan will not not cost taxpayers anymore money, according to FCC Commissioner Robert McDoweell, whose quoted in the Businesweek report.”

  1. I’m sure everyone’s bills will go down with this new government measure; and, I hope they dream up even more services that will cause our bills to remain the same or decrease.

    1. Well stated. While I feel for the folks who don’t have high speed service I don’t think it’s a “right”. AT&T and others are in business to make money. They do not owe anybody anything. If you want an ocean view do not move to Arkansas. If you want to fish in the Great Lakes do not move to California. If you want high speed connections live where it’s offered. It’s that simple. Our government caused the big recession a few years ago by telling people (and banks) that “everyone in America has the right to own their own home”. No they don’t. Nor do they have the right to own a new Cadillac. If you can’t afford it you don’t have the right to buy it. If you want a fast Internet connection live where it’s offered. I don’t want my government subsidizing anybody’s high speed hook up on my dime. if you live where it’s not offered, pay to have it brought in or wait until civilization arrives after enough people move to your neck of the woods.

  2. Is this the forum where I complain about the government and demand it be torn down. Anarchy is the only way. Let private enterprise run the nation. They always have the people’s best interests at heart.

    1. Uhh, no. Hopefully this is the forum where we can hope for fiscal restraint and sanity. And your attempt at overblown hyperbole is just lame. Just because some of us expect our government to live within its means, doesn’t mean we advocate anarchy. PS: You forgot to add the bit about starving Grandmom.

  3. I’m actually in favour of the government building infrastructure. It’s the sort of thing they do well. I don’t trust corporatism to have our best interests at heart.

    1. The problem with government is… when things go wrong, what alternative do you have? With a company, if they provide crappy service or charge too much, I can go somewhere else. But when the government has essentially a monopoly, I’m screwed. I can’t go anywhere else because there’s no competition. I don’t trust government nor do I trust all corporations. The thing that keeps companies on the straight and narrow is competition and the legal system. And of course, when it comes to governement and legal system, well they will stack the deck of laws anyway they see fit.

  4. “…The FCC’s order lets companies levy a new charge on phone subscribers, Joel Kelsey, Washington-based political adviser for Free Press, a Florence, Massachusetts-based policy group, said in an e-mail yesterday. The vote won’t lead to higher bills, said FCC Commissioner Robert McDowell, a Republican.”

    Of course it won’t… and 2+2=5.

  5. Internet access is now being recognized as a basic human right. And since dial-up is as viable a technology as floppy discs… highspeed access needs to be made available to everyone.

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