New FCC Rules Could Delay Further Broadband Expansions In Rural USA


July 13th, 2012 by admin

New rules implemented by the Federal Communications Commission could delay further expansion of broadband services in rural areas — and bring higher bills. The Universal Service Fund, a source of revenue for providing rural areas with investment in telecommunications service, is being replaced with the Connect America Fund. It directs half of the money from the fund toward larger companies like CenturyLink and Verizon that aren’t spending as much on expanding broadband in rural areas. Tom Lovell, general manager of Clear Lake Independent Telephone Company, says local communications providers like C-L-Tel have invested 235-million dollars in expanding broadband services, and now the FCC has cut off a major funding stream to continue expanding.

He says most of that is through loans the companies have made. Lovell says some of the money now has been shifted by the FCC from the smaller carriers to the larger companies. Also, they’re cutting back some of the access fees some of the long-distance carriers would pay the smaller companies to transmit data and voice over their networks and shift that more onto the customer. Lovell says the independent companies have been on the leading edge of building up broadband, especially in rural areas, while the larger companies haven’t because they don’t expect much return on that investment.

He says the independent companies have a different philosophy on what and when they want to invest in while the larger companies just have to keep the stockholders happy. Lovell says the independents have been doing the investment and now the FCC is not telling those companies that they’ve done a great job in expanding broadband but instead is shifting money to the larger companies that don’t want to make that investment. He says it’s creating a problem because now it’s tough maintaining and continuing those upgrades. Lovell hopes the situation can be resolved so rural areas across the country — like in Iowa — can be able to expand broadband services in the future.

He says the new rules are going to have an impact on rural America and people should contact their representatives in Washington D.C. and ask them to make sure whatever rules are passed, that everyone can have access to broadband services in the future. Connect Iowa, a broadband advocacy group, estimates 26-thousand jobs are created or saved with every seven-percent increase in broadband adoption.