Universal Service Fund for Cell Phone Systems Capped

Matt Rezac sent me a great article today, from the Lincoln Journal Star (Funding for rural wireless faces threat).

The (optimistically) good news from the article is that apparently the FCC is planning to take a look at the Universal Service Fund. The USF is money collecting from telecommunications charges that goes to support telecommunications in rural areas. It’s a great to help an industry subsidize growth but the fund collection needs to change with new technology. (Folks with Internet phones are not currently charged.)

Until the reform is enacted (or planned) the FCC has proposed capping the amount of subsidies paid to improve cell phone systems in rural parts of the United States. This as the article states is bad news for rural areas, where providers need subsidies to build out their networks.

Rep. Lee Terry (R) has introduced legislation that would reform the fund in several ways, including a provision that would allow the fund to be used to subsidize broadband service to rural Nebraska.

Two facts from the article that I found specifically interesting:

  1. Since 1998 cell phone companies have received only $2 billion in subsidies compared to $24 billion for landline companies.
  2. In Nebraska, the number of cell phone lines exceeded the number of landline phones last year.
This entry was posted in Policy, Rural by Ann Treacy. Bookmark the permalink.

About Ann Treacy

I have a Master’s Degree in Library and Information Science. I have been interested or involved in providing access to information through the Internet since 1994, when I worked for Minnesota’s first Internet service provider. I am pleased to be a part of the Blandin on Broadband Team. I also work with MN Coalition on Government Information, Minnesota Rural Partners, and the American Society for Information Science and Technology.

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