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FCC presents broadband ideas, targets phone subsidy and broadcast spectrum

The Federal Communications Commission will unveil during a meeting Wednesday its proposals to expand access to broadband Internet service and its plans for encouraging more people to adopt the technology. The agency is also expected to tackle two other controversial issues during the meeting: a $7 billion rural phone subsidy program and a plan to allocate some broadcast spectrum to mobile broadband services.

The task of bringing affordable broadband to every American home as mandated by Congress will force the FCC to address problems that previous agency leaders were unable to solve. And it could bring the FCC, mired in arcane phone and cable television rules, into the Internet age.

For instance, the agency’s broadband task force, led by Blair Levin, is expected to propose reforms to an outdated and politically charged federal fund that gets about $7 billion a year from long-distance phone fees to bring traditional phone lines to rural areas. As part of reforms to the Universal Service Fund, the FCC is expected to propose using a large portion of the coffers for broadband service.

Paul Gallant, an analyst at Concept Capital, said the changes could pose risks for rural carriers who have relied on subsidies for maintain their businesses. Lawmakers and the FCC say that some carriers have abused the fund, getting large returns from the fees. They say that high-speed Internet is a core communications service that the fund could support -- particularly for buildouts to rural areas that are costly with little return on expenses.

But Gallant says he is seeing "a more constructive tone coming from FCC staffers" toward smaller regional carriers compared to 2008, when the agency under then-chairman Kevin J. Martin was trying to reform the program.

The task force also is expected to argue that spectrum currently occupied by over-the-air broadcasters should be made at least partially available for wireless high-speed Internet services as part of an effort to jump-start the next generation of smart phones. And Levin’s team is also likely to propose new consumer disclosure rules to help people feel like they can trust their service providers more.

By Cecilia Kang  |  December 16, 2009; 8:00 AM ET
Categories:  Broadband , FCC  
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