The Federal Communications Commission accepted Chairman Julius Genachowski's proposal to overhaul a program dedicated to building telephone connections in remote places. The $8 billion subsidy program that Genachowski dismantled was written in the dial-up era of internet and was structured to subsidize basic phone service—not broadband. The commission voted 4-to-0 to restructure the subsidy program.
Regulators approved a $4.5 billion subsidy to extend high-speed internet to 18 million Americans unable to reach broadband internet. The alteration of the FCC's subsidy program will ensure that they're building long-lasting technology in rural places rather than dated dial-up technology.
We are taking a system designed for the Alexander Graham Bell era of rotary telephones and modernizing it for the era of Steve Jobs and the Internet future he imagined, said Genachowski at the meeting in Washington. He believes that broadband may spur hundreds of thousands of jobs in the affected areas.
The effort makes huge strides in closing the digital divide, one that's apparent in remote communities, where they often don't have access to high- speed internet. The FCC will also lower rates it charges companies to connect calls in remote areas, which will help more people get connected in these areas and promote business.
The FCC's order relies heavily on competitive bidding in awarding subsidies to phone companies, sends more funds to hardest-to-serve areas and places stricter limits on new fees carriers may levy to make up for reduced connection charges an FCC spokesman said in a Bloomberg Businessweek report.
Still, some are critical of the decision—mainly wireless carriers and companies that will not be allowed to bid on servicing these remote places. Other telecom providers believe that the FCC is giving incubmant phone companies an unwarranted advantage to provide broadband to the area. Mobile broadband providers feel like the FCC is discouraging mobile broadband carriers—the ones pushing innovation in the broadband industry—from investing dollars into these areas.
The new plan will not not cost taxpayers anymore money, according to FCC Commissioner Robert McDoweell, whose quoted in the Businesweek report. The announcement comes after years of lobbying from rural phone companies, large telecommunication companies, cable companies, wireless carriers and consumer groups — who each had reasons for trying to impact the bill.