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Government Networking The Almighty Buck

FCC Moves To Convert Phone Fund To Broadband Fund 91

Posted by Soulskill
from the only-a-decade-or-so-behind dept.
medv4380 writes "The Federal Communications Commission is expected to change the Universal Service Fund so that the funds are directed toward broadband infrastructure instead of rural phone infrastructure. '... while the world has changed around it, USF – in too many ways – has stood still, and even moved backwards. The program is still designed to support traditional telephone service. It’s a 20th century program poorly suited for the challenges of a 21st century world.' You can see a transcript of what was presented to the FCC (PDF) online."
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FCC Moves To Convert Phone Fund To Broadband Fund

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  • by pcjunky (517872) <walterp@cyberstreet.com> on Monday February 07, 2011 @08:37PM (#35132526) Homepage

    USF is used to provide phone service at the same price for everyone anywhere even if it costs the phone company to provide the service. Anyone anywhere in rural area can get phone service at the same price. Does this mean the same will happen to broadband?

    • by icebike (68054)

      Probably it means some form of rural broadband or Wimax or something for shcools. But maybe not for every farmer along the route.

      It was Obama's promise [mcclatchydc.com] to push the internet into every classroom and village library and small town hospital.

      • by Phoghat (1288088)

        Probably it means some form of rural broadband or Wimax or something for shcools. But maybe not for every farmer along the route.

        I on the other hand think it is for every farmer along the route as well. Farmers depend on the net a lot for things like weather forecasts, market prices for crops and livestock etc. I'd bet they're the squeaky wheel that's going to get greased and to the benefit of everyone else

    • NO, all those programs were set up under a more liberal government... Today conservative government is all about making profits for companies.... Did you really think the government was working for you?
    • by Seumas (6865)

      No, this means telcos will get a nice big welfare check, just like the broadband carriers got.

    • >>>Anyone anywhere in rural area can get phone service

      Not the "same" price. It costs more to connect a phone in the boonies, then it does in the city or suburb, but the price will be reduced/subsidized by the USF fee.

      And what this means for broadband - Phone companies will start offering DSL to everyone, again, subsidized by the USF. So now no one can claim, "I don't access to broadband" because they will. DSL has a frequency width of 100 MHz >>> the 0.004 MHz of phone lines.

      • One question is how will they define "broadband". ADSL is a marvel of modern engineering but high speeds only work over relatively short lines. Cable only tends to be available in urban areas. Afaict there are only three ways to get higher speeds to everyone, none of them cheap.

        1: shorten the phone lines/reduce the number of users on one cable segment (most likely through some sort of FTTC/FTTP setup).
        2: move to a totally different technology (e.g. FTTH)
        3: bond multiple lines (this isn't a bad idea if you w

        • Broadband is defined by frequencies, not bits. So even 512k DSL is still broadband, because it is wider than a phoneline (100 MHz >>> 0.004 MHz) not because it is some arbitrary bitrate.

          As for speeds, standard DSL can do 7 Mbit/s if you install a "repeater" every mile. 3 Mbit/s if you install the repeater every 5 miles, and would meet the FCC's current definition of "high speed" internet.

    • by Charliemopps (1157495) on Monday February 07, 2011 @09:52PM (#35133146)
      Damned right. I've worked for 3 different telcos and in every single one of them, the most profitable department has always been "Regulatory Affairs." Obama announced his broadband stimulus program and within a few months they were waring money hats while they worked on projects that had been in planning for over 5 years. The government paid telcos to do work that the telcos had already planned to do anyway. It was a cash giveaway, nothing more. The government needs to enforce net neutrality, get the department of weights and measures involved in broadband speeds and stop giving money to private business without requiring results.
      • by yuhong (1378501)

        In this case it was even worse. The government was paying telcos to do what already has been done, which is exactly what this aims to fix.

    • Just because you keep repeating the same FALSE article, does not make it any more true. READ the 1996 Telecommunications Act sometime. Most of the money was designated, not for optics, but for phone lines to be upgraded to Digital service. And the phone companies complied with that demand by Congress.

      If you want to place blame, then place it on the congressmen for writing such a dumb bill.

  • by Anonymous Coward

    Okay, that's step one. Now how about collecting the USF from cable companies the same as telcos? Or treating broadband providers as common carriers?

  • From TFA: (Score:4, Interesting)

    by PolygamousRanchKid (1290638) on Monday February 07, 2011 @09:22PM (#35132884)

    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.

    So, instead of paying $2 a month, so that yokels in the boonies can call each other and gossip, all them them city folks will now pay $20 a month, to subsidize broadband for folks who live on in the boonies can download porn to their ranches!?!?

    [Checks Slashdot name] . . . Oh, wait, maybe it is a good idea to subsidize folks who live on ranches in the boonies.

    Although, I read an article in The Economist about UNESCO: http://en.wikipedia.org/wiki/UNESCO#Controversy_and_reform [wikipedia.org] . The article said that half of the UNESCO budget never made in out of Paris, France, where the headquarters are located. I thought that was pretty amusing, until I was on a business trip in Geneva. Then we went out for lunch and waiter asked us if we worked for the UN (which was just down the road). When we said no, he treated us like unwanted, unwashed infidels. We noticed that the UN folks there were chowing down on kings' portions of food, and just got a bill for their meals, which the UN would pay for. Well, who pays the budget for the UN . . . ?

    This is another trick in politics: Get someone else to pay for what you consume. When this FCC "reform" passes into law, I would be interested to see where all those dollars were being spent. But, alas, politicians do their best to avoid transparency . . .

    Oh, well.

    • The cost of DSL in rural areas probably will not be that great. I suspect they could fund it with much less than $20, since as much of the existing copper twin wire cable can be used, with loop extender equipment being used to regenerate the signal.

    • by mysidia (191772)

      [Checks Slashdot name] . . . Oh, wait, maybe it is a good idea to subsidize folks who live on ranches in the boonies.

      *Fwap*

      You insensitive clod. I'm a nerd who lives out in the boonies 40 miles from the nearest major city, and i'm sick of having low speed net connections. I want city dwellers to pay an extra $40 month so it will be possible for me to have FTTH, dammit.

      The only thing that's messed up is the USF is tagged onto the phone bill. They should tag charges on to the health insurance, electr

      • >>>I'm a nerd who lives out in the boonies 40 miles from the nearest major city, and i'm sick of having low speed net connections.

        Move.
        - Don't steal money from your neighbors' wallets to subsidize your rural lifestyle. Move in closer to where DSL or CATV internet exists. Government should stop subsidizing sprawl and encourage more living close to the city.

        >>*Fwap*
        >>You insensitive clod.

        Right back at you. My bills are high enough; I have no desire to support you too. ----- O

        • Oh and the healthcare requirement is illegal. The Union government can not mandate what products you must buy - it was never given that power by the Member states.

          That's why we need to expand Medicare and go with a single payer system. Libertarian heads are exploding all over Slashdot. :-)

          Really off topic, but the opposition to the healthcare mandate from the "I don't want to pay for someone else's ....." group baffles me. The mandate has no effect if you are already being responsible and have your own in

    • When I worked for the government, we were allowed to book $120 per night hotel rooms. Outrageous. Really government workers should not receive more than half that allowance ($60) and book at places like Motel 6 or Super 8.

      >>>all them them city folks will now pay $20 a month, to subsidize broadband for folks who live on in the boonies
      >>>
      This is why city people pay higher taxes, and the money flows to the red, rural states. City people are being forced to subsidize the rural lifestyle. (

      • by drkoemans (666135)

        When I worked for the government, we were allowed to book $120 per night hotel rooms. Outrageous. Really government workers should not receive more than half that allowance ($60) and book at places like Motel 6 or Super 8.

        That must be a joke. The "government" is a big place, federal? state? local? I work for Washington State and our per diem is on a sliding scale based on location. Rural work our hotel is just $35, with a $20 meal allowance (all three meals). I won't describe some of the flea bag places i've had to stay in. in major markets, like san francisco, the rate goes up to $120 which, depending on the season, can be hard to accommodate. I don't know what agency you were with but don't shoehorn all "government" into a

  • by Eravnrekaree (467752) on Monday February 07, 2011 @10:09PM (#35133282)

    Hopefully this will mean a rollout of DSL in remote locations. DSL actually is the best way to bring internet to rural areas, as most of the cable is already laid, all that needs to be done is to install some signal regeneration/loop extender equipment. Fiber optics can also be brought to a node part of the way, but the amount of cable that needs to be replaced is still less. It is amazing the bandwidh that can be seen with newer DSL modems, its enough to even carry video. Its amazing what can be squeezed out of a twisted pair.

    • by Belial6 (794905)
      Amazing is right. They can even do voice. Voice that can connect to telephones in other areas. Switching this to broadband makes complete sense, as doing it will not even slow down the previous efforts. Anywhere they get broadband access, they inherently get telephone access.
    • >>>It is amazing the bandwidh that can be seen with newer DSL modems, its enough to even carry video.

      I get the feeling you are being sarcastic, but Japan is the world's 2nd fastest country for broadband, and they use almost nothing but DSL. Their latest standard can handle 120 Mbit/s over standard copper wires. That's enough bandwidth to feed 12 different HDTVs with content.

  • by Anonymous Coward

    So let me get this straight. Congress back in 1934 passes a bill to fund rural phone lines by charging city slickers an extra tax on their phone bill.

    Now 70 years later the FTC decides on its own that it can levy any tax it wants to against anyone it wants to and put the money towards any program it so desires.

    Does Congress' power to tax and make law have little meaning anymore? Is our form of government becoming one in which bureaucrats decide for themselves what taxes to levy and what laws to create?

    I'm

    • by fyrewulff (702920)

      Try reading harder. They want to change what the money can be officially allotted towards. There is no new fee being added, just the destination of the current one. No new tax is being levied against you.

      • He still has a point. Congress passed the bill to tax phone service. Congress, additionally, designated that the moneys raised by that tax would be used to fund rural phone lines. The FCC does not have the authority to now use those moneys for some other purpose. The FCC may request that Congress pass a law designating that those funds can be used for rural broadband, but it is not allowed to just decide to use those funds for it because the original purpose is obsolete (in their opinion, which in this case
    • So let me get this straight. Congress back in 1934 passes a bill to fund rural phone lines by charging city slickers an extra tax on their phone bill.

      Now 70 years later the FTC decides on its own that it can levy any tax it wants to against anyone it wants to and put the money towards any program it so desires.

      Nope.

      First of all, the Federal Trade Commission (FTC) isn't involved in this story at all, the Federal Communication Commission (FCC) is.

      Second, the provision of law governing the universal service fund (47 USC Sec. 254) has been amended by Congress since 1934, and the current version adopted by Congress states:

      Universal service is an evolving level of telecommunications services that the Commission shall establish periodically under this section, taking into account advances in telecommunications and information technologies and services.

      See, the thing with Congress' ability to make law is that it keeps being exercised, its not just something that happened once in the distant past.

      Does Congress' power to tax and make law have little meaning anymore? Is our form of government becoming one in which bureaucrats decide for themselves what taxes to levy and what laws to create?

      I'm hoping at least a few people on SlashDot recognize the types of precedents that have been set over the last several years in how it undermines the intentional separation of powers in the US Constitution. It's more insidious and the long-term consequences more dire than I'm sure most people here realize.

      I'm hoping that at least a few people on Slashdot wil

  • by dave562 (969951) on Monday February 07, 2011 @11:42PM (#35133918) Journal

    They are directing Federal funding to broadband services. Federal funding is a fun thing. It comes with all sorts of stipulations.

  • So this means ISPs will finally fall under Common Carrier laws like telephones right? Right?

    Why yes, I am rather interested in purchasing your bridge.
  • Congress created this tax. When they did they also specified what it would be used for. The FCC does not have the authority to decide to use this money for something else, no matter how worthy that something else might be, nor how obsolete the original purpose might be.
    The U.S. Constitution says that only Congress may decide how Federal money can be spent.
    • Congress created this tax. When they did they also specified what it would be used for. The FCC does not have the authority to decide to use this money for something else, no matter how worthy that something else might be, nor how obsolete the original purpose might be.

      Really? So what do you think Congress defined the tax as being for? Telephone service alone? Nope, not under the current version of the law adopted by Congress governing the USF. 42 USC Sec. 254(c)(1):

      Universal service is an evolving level of telecommunications services that the Commission shall establish periodically under this section, taking into account advances in telecommunications and information technologies and services.

      Seems to me that Congress has specifically granted the FCC authority it has proposed using.

      Next time you want to accuse someone of breaking the law, try checking what the law is first.

      • You are correct. Congress wrote a bad law (what a surprise). The law should specify what this tax is for and when that purpose becomes obsolete, Congress should abolish the tax. If there is a new need, Congress should pass a new law authorizing a tax for that purpose (or just paying for it out of general funds). I generally oppose special purpose taxes, although this is the type of special purpose that makes sense. However, the purpose should be clearly defined and the tax eliminated when the purpose is acc
        • You are correct. Congress wrote a bad law (what a surprise).

          That's not what I said.

          The law should specify what this tax is for and when that purpose becomes obsolete,

          The law specifies what the tax is for: it is for improving access to advanced telecommunications services.

          Its actually rather routine for Congress to set high-level policy and priorities and delegate ongoing administration to regulatory agencies. That's, actually, the whole purpose of having regulatory agencies.

          • I know that it is rather routine for Congress to write bad laws like this one. "Improving access to advanced telecommunications services" is entirely too subjective, especially for a special purpose tax. I do know that Congress often delegates quite a bit to regulatory agencies. I beleive that that is bad policy. It encourages people to blame bureaucrats for things that they should be blaming their Congressperson for.
            • I know that it is rather routine for Congress to write bad laws like this one.

              I really don't think the alternative you seem to be offering -- Congress essentially abolishing all executive branch regulatory bodies and doing everything currently done through regulation as legislation -- is really desirable.

              "Improving access to advanced telecommunications services" is entirely too subjective

              That's the high level purpose. The law (47 USC Sec. 254) provides additional detail on both the substance (factors to be considered in deciding what should be encompassed ) and procedure (mechanisms by which changes shall be considered and adopted) associated with the determination o

      • 42 USC Sec. 254(c)(1):

        Actually, that's wrong. It's title 47, not title 42, so that should be 47 USC Sec. 254(c).

  • On my last months' bill the Federal Universal Service Fund charge was $2.18 for Long Distance, and $0.94 for Local Service. Add to that the $6.07 Federal Access Charge (which Qwest basically pays to itself for access to the long distance network), the 3% Federal Excise Tax (which was put into place to fund the Spanish-American War in 1898, repealed and reinstated several times since), and various other Universal Service Funds, Relay Service Funds, 911 Fund, Regulatory Surcharge (a faux tax put in place to r
    • by Shompol (1690084)
      ...and now that the landline is drying out, FCC is looking for greener meadows to attach to. Prepare to pony up for FCC services -- they will monitor all your net traffic to ensure net neutrality, among other things.
  • If there's a USA wish/murmur to combat bad things on the internet [computerse...icles.info], why not pull another Tor [usenix.org] and fund development of things like DNCCurve [dnscurve.org]/CurveCP [curvecp.org] through this?

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