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