WASHINGTON, Oct. 28- The Federal Communications Commission (FCC) voted unanimously yesterday to approve a $4.5 billion subsidy to expand broadband Internet service to approximately 18 million people. Chairman Julius Genachowski said the program could create hundreds of thousands of jobs in rural areas. 

The Connect America Fund will provide broadband service in an effort to modernize and streamline the Universal Service Fund (USF), a program that built telephone connections in rural, hard-to-reach areas. 

“Over the next year, the Connect America Fund will bring broadband to more than 600,000 Americans who wouldn’t have it otherwise,” Genachowski said.  “Over the following five years, millions more rural families will be connected. And today’s Order puts us on the path to get broadband to every American by the end of the decade – to close the broadband deployment gap which now stands at close to twenty million Americans.”

The FCC also voted to lower the rates that companies charge to connect calls through Intercarrier Compensation (ICC), or the charges that one carrier pay to another carrier.

“Whatever the causes, and we could debate them for hours, our current USF and Intercarrier Compensation regimes are broken,” said Commissioner Michael Copps. “Legacy access rates encourage carriers to maintain yesterday’s technology instead of reaping the benefits of today’s IP based networks.”

Genachowski said the commission intends to extend the benefits of mobile broadband coverage to tens of thousands of underserved road-miles. He also said the reforms will directly assist farmers, who need broadband to access commodity pricing, crop information, real-time weather reports, and online auctions.

“New wired and wireless broadband will be a lifeline for rural communities currently being bypassed by the Internet revolution,” Genachowski said. “Young people who didn’t see a future in their small hometowns will now be able to access a new world of opportunity. Today’s action will empower small businesses that otherwise couldn’t exist in small-town America, and create new jobs in those communities. 

The National Telecommunications Cooperative Association (NTCA), the Organization for the Promotion and Advancement of Small Telecommunications Companies (OPASTCO) and the Western Telecommunications Alliance (WTA) released a statement that they are “hopeful that today's order will help restore some measure of regulatory certainty,” but they "remain concerned that parts of the current reform package will have substantial adverse impacts on rural consumers and the small, community-based carriers of last resort committed to serve them."

"This is just the beginning of USF and ICC reform for rural carriers," said OPASTCO President John Rose. "The devil is in the details. Today's FCC decision will be closely analyzed to determine exactly what it means for our members and their customers.”


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