The Universal Service Fund is too bloated to help expand broadban...
The Universal Service Fund is too bloated to help expand broadband deployment, FCC Comr. McDowell told an NTCA conference in Orlando. “The Fund simply cannot afford to subsidize broadband connectivity under its current structure,” McDowell said: “The bitter truth…
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is that we can’t keep asking more and more folks to prop up a failing system. Fundamental reform is necessary.” The FCC last summer voted to expand the pool of USF contributors, but “the contribution factor that was supposed to have declined as a result of the FCC’s action is back on the rise again,” he said: “Like a fever that initially responds to treatment only to rage again the next day, the factor initially declined from about 11 percent to 9 percent once we broadened the base. But for the first quarter of 2007 it has risen again to 9.7 percent -- and early indications are that the second quarter figure could spike to over 11 percent. If bold action is not taken soon, this fever will threaten the patient’s life.” The contribution factor is the percentage of eligible revenue that telecom companies must contribute to the USF, and its rise usually reflects a rise in USF disbursements. Wireless spectrum is one hope for broadband deployment in rural areas served by NTCA members, said McDowell: “I hope that you'll be active participants in the 700 MHz auction. The Commission is doing its part to help you move away from reliance on the Universal Service Fund by opening new windows of opportunity for the construction of new delivery platforms with new technologies and robust competition.”