In an address at the OPASTCO conference in Seattle today, FCC Chairman Julius Genachowski attempted to justify the Universal Service reforms proposed in the National Broadband Plan issued in March.

Small carriers that receive Universal Service funding, such as those represented by OPASTCO, support the National Broadband Plan’s recommendation to transition today’s voice-focused fund to one focused on broadband. But they have been critical of the plan’s recommendation to fund only 4 Mb/s downstream and 1 Mb/s upstream, arguing that the speed should be higher.

“There are many issues we need to work through,” Genachowski told OPASTCO attendees.

The chairman asked attendees to focus on five core principles, one of which was “fiscal responsibility.”

“Funds are finite and we must not unfairly burden consumers,” said Genachowski.

Genachowski estimated the cost of bringing 100 Mb/s connectivity to all Americans—a goal favored by some rural advocates–at $320 billion. He said meeting that goal would require a seven-fold increase in the contributions from consumers who support the fund.

“In addition to the fiscal burden, this would run counter to [our] purpose because it would drive the neediest in rural and urban America off the network,” Genachowski said.

Genachowski called upon critics of the 4 Mb/s goal to provide more data to support their arguments. “Those who support more than four megabits must answer some basic questions. How much will it cost? And who will pay for it?”

The chairman did not address another element of the plan that has drawn criticism from rural telco groups—a recommendation that all carriers should transition to price cap regulation.

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5 thoughts on “FCC Chairman’s OPASTCO Address: Universal Service Funds Are “Finite”

  1. 4 Mbps down, 1 Mbps up is a good *starting point* for rural broadband. Actually, 1.5/512 is a good starting point. Or 3/768. But I digress…

    Personally, I'm trying to figure out where the 4/1 number came from. Not a single ISP that I know of offers such a package, and I'm pretty sure no service magically becomes available at that point; HD video is closer to 3 Mbps.

    What's rather odd is that 4/1 is out of reach of standard ADSL2+ in most cases, so you'd need to bond or use Annex M to get that kind of upload speed. Such things cost money…probably more money than a 5/768 tier would run.

    Last but not least, wireless technologies now exist for which 4/1 is child's play. I've been testing inexpensive equipment that has no problem delivering 40-80 Mbps over several miles, depending on antenna gain and other factors. It's not 100 Mbps…when the next 802.11 spec comes out maybe we'll get there…but it's a world better than 4/1.

    1. Actually you need 4mg for HD. Bill is right. 4mb is for wireless carriers. The FCC has a vision of everything being connected wirelessly or via satellite. Both are more expensive and less stable than simply putting fiber in the ground. Its very disappointing to say the least.

  2. Funny you mention wireless at the end, because that's exactly why 4/1 was chosen, so wireless carriers could qualify. But we all know that 4/1 will not be sustainable. We'll end up funding a bunch of wireless carriers to deliver 4/1, and then be stuck there, while the rest of the world passes us by with 20 Meg + services. It's not forward thinking enough.

    Here's the thing, why don't they pick speeds to strive for – say 25 Meg – not speeds that are already attainable and outdated?

    1. Current wireless techs can blow past 4/1 without a problem, assuming inexpensive bandwidth is available to fuel the service. Though, granted, it's harder for mobile broadband to break 4/1 than it is for fixed wireless to do so.


    “Funds are finite and we must not unfairly burden consumers,” Who is burdening the consuer- the FCC and State regulators think it is okay. Take the reducing of the Access rates. The system was working great with the industry paying for it. No one is starvng in this industry, especially the Big Boys. It is okay for us to reduce our access revenue and then bill the consumer for it, but the FCC says that we should not get funding for higher bandwidths that the FCC and Congress is pushing onto the consuer. Who is paying for the Stimulus packages? I think my children and grandchildren will be paying for stimulated bandwidth for their whole life.

    Maybe if us folks in Rural America should not get funding for more than 4 meg and the metro area gets 100 meg, thats a 25 to 1 ratio, then we start paying INCOME TAX on a 25 to 1 ratio.

    We have eaten dust in the past we can eat it again.

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