In an address to the Information Technology and Innovation Foundation, FCC Chairman Julius Genachowski offered a preview of what the telecom industry should expect to see from the commission at its February 8th meeting with regard to Universal Service Fund reform. And in a briefing with reporters this afternoon, other senior FCC officials added a few additional details about what to expect.
The FCC will release a notice of proposed rulemaking aimed at transitioning the Universal Service Fund (USF) program to support broadband, rather than voice and phasing out today’s inter-carrier compensation system that includes subsidies to support telecom service in high-cost areas. The NPRM will recommend a two-phase implementation, with some fairly specific recommendation for the first phase and more broad goals for the second phase.
Phase one recommendations, Genachowski said, will provide “certainty” about whether VoIP should be subject to inter-carrier compensation requirements and will include a specific proposal to contain the costs associated with the USF program as it transitions to focus on broadband. Recommendations also will include “more reporting requirements” and “better measurement of the performance of the fund as a whole.”
Phase one also will focus on bringing broadband to unserved areas, the chairman said. In his remarks, he made several references to a “rural-rural” broadband divide, noting that some rural areas have higher-speed connectivity than some urban areas, while others lack any availability of broadband service.
In the second phase, Genachowski said, Universal Service support for voice service will be totally phased out but he emphasized the idea that “we will make sure all Americans have access to voice service and can make calls from their homes.” Per-minute inter-carrier charges also will be eliminated during this phase, Genachowski said.
“We will work with Congress and all parties on this plan,” Genachowski said. He also vowed to “work closely with the states” and to ensure that the process is data-driven and fact-based.
In addition, Genachowski said reforms should be based on four pillars. These include modernizing Universal Service to support broadband, fiscal responsibility, accountability and market-driven, policies.
Neither Genachowski nor the other FCC officials discussed the data rates that would be recommended for the new Universal Service fund but the officials said that a specific speed recommendation would be part of the NPRM. The entire plan will have about 250 pages, the officials said. Although tomorrow’s actions will focus on the high-cost portion of the Universal Service fund, Genachowski also said the commission will address the low-income Lifeline and Linkup portion of the program next month.