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Posted at 2:51 PM ET, 02/ 7/2011

FCC to move toward overhaul of $8 billion phone fund for Internet

By Cecilia Kang

The Federal Communications Commission is expected to move forward Tuesday on a long-fought plan to convert federal phone subsidies for rural areas into funding for high-speed Internet connections.

The five commissioners are expected to approve a proposal by FCC Chairman Julius Genachowski that allows the public to comment on his plan to overhaul the $8 billion subsidy program. All commissioners are expected to vote in favor of the proposal. A final order will be drafted and voted on in months, experts say.

The federal fund, known as the Universal Service Fund, comes from a line-item charge for phone customers, usually about $2 a month. That money goes toward building and maintaining copper-wire phone connections to remote areas that would be too costly to serve otherwise. The subsidy was created by the 1934 Communications Act, and regulators today say the fund needs to be used for high-speed Internet connections as people increasingly rely on the Web to gather information and communicate.

"It's grown to be an inefficient, and I hope as a 21st-century program, it would support only efficiencies of current technologies and deploy competitive pressures to bring about the best results for consumers," said Commissioner Robert McDowell, who will vote in favor of the reforms Tuesday.

By Cecilia Kang  | February 7, 2011; 2:51 PM ET
Categories:  FCC  
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It's about time. Another bravo for the Obama administration.

Posted by: zenduane | February 7, 2011 4:50 PM | Report abuse

zenduane- I hope you are being sarcastic...that's just what we need to do is spend 8 billion dollars for internet access for people WHO CHOOSE to live in rural areas. Newsflash..WE ARE BROKE...WE HAVE NO MONEY. jeez. Yeah, way to go Obama...spend more money we don't have.

Posted by: diglife | February 7, 2011 5:03 PM | Report abuse

@diglife...aren't you a few cards short of a deck. Most people who live in rural areas do so because it is where they grew up, inherited property/house/farm. Basic needs of today's societies should be met for everyone, not just "city folk". I imagine if you had it your way, then rural folk wouldn't have services like Postal Mail or Electricity. And by your way of thinking, people who CHOOSE to live in the city shouldn't complain about their property taxes, high rent, no parking, etc.

get your head out of your arse.

Posted by: cgallaway2000 | February 7, 2011 5:15 PM | Report abuse


Posted by: marcbdoran | February 7, 2011 5:15 PM | Report abuse

@cgallaway2000 - Your missing the's not that i don't want them to have internet...its the simple fact that WE ARE BROKE. What part of broke do you not understand? Those kids you speak of...they are inheriting a lot more than property/house/ & farm. They are inheriting DEBT and lots of it. It doesn't take a rocket scientist to understand this. Am i wrong cgallaway2000 are we not in debt? It's simple math. We are spending 8 billion on a project when we ARE BROKE. Is that how you manage your money? I didn't think so. Couldn't they get satellite internet like everyone else? What they can't afford it? Hmmm...neither can the US Government. You are the one that needs to get your head out of your arse.

Posted by: diglife | February 7, 2011 5:36 PM | Report abuse

@diglife - Do you like food? Do you plan on eating tomorrow? If so, maybe you'd like to reconsider telling farmers and those who support them what they can and can't have - lest they decide that arrogant yet strangely helpless city folk like you don't deserve to have food. Shame to waste money on transport and agriculture given that we are so broke.

Posted by: fickstdu | February 7, 2011 9:56 PM | Report abuse

WE ARE BROKE. NO $$$...If you own a farm i would actually like to think your one of the few out there that would actually agree we don't need to spend 8 billion on internet to rural areas. I wasn't saying farmers are broke..i was saying they have access to satellite and IF they can't afford it too bad...we can't either. If you want to rely on the government be my guest. If you want our kids to get deeper into dept and rely on the government I can't stop you. Obviously you already have internet so this 8 billion dollar government funded project isn't really helping you is it? Once again...WE ARE BROKE. I should also mention i don't rely on you for beef ( i have cows) and gardening really isn't that difficult. I respect farmers a lot...but have little respect for anyone who wants to rely on the government. I can also say if the demand for internet is that great in rural areas they would have it by now. WAKE UP WE HAVE NO MONEY!!

Posted by: diglife | February 8, 2011 8:44 AM | Report abuse

I live in a Rural area and I am on 3G internet and alot of times it slows down to 56Kbps. In the rural area there is no available DSL, or Cable internet, the only choices are Satellite Internet which is very expensive, Dial-up, and 3G there if no 4G or WiMAX currently in the area. a few months ago I was on Dial-up that went 46.6Kbps and was VERY unstable. I wish there was something better then 3G in my available Price range.

diglife have you ever been in a rural area? I moved to a rural Area in Oct 09 with my parents there was DSL before I moved up were I am now and when I moved and got settled there was no more DSL and all Verizon offered was Dial-up. The DSL that was available all the slot got taken up and now Verizon is not reopening the slots and keeping them closed and not reopening them. I was on Dial-up about a year and I hated it Facebook took 5+Min. and sites like this took 10+min to load because of lots of loss packets

Even on 3G I use over 22GBs a month mainly from updates on my PS3 which I can't play online or play 99% of my PC games I have got over $100 in games back when I lived a place with DSL that I can't play online at all.

Posted by: spikey123bat | February 9, 2011 7:06 PM | Report abuse

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