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Connect America Fund

10-90

This section summarizes our proposed framework for reform. Our proposals are designed to achieve the four core principles above - modernizing and refocusing USF and ICC to ensure all Americans have access to robust, affordable broadband and to accelerate the transition to IP networks; fiscal responsibility; accountability; and use of market-driven and incentive-based policies - and we seek to ensure that the future of USF and ICC are consistent with those principles. We recognize, however, that there are a number of potential paths to that future state. We also recognize the difficulty of precisely forecasting the consequences of changes to a system as complex and interdependent as USF and ICC, as well as the benefits of piloting innovative policies - such as competitive bidding to support build out and ongoing operation of fixed and mobile broadband networks - before broader implementation. We therefore propose several specific, near-term steps that will accelerate broadband investment in unserved areas and set USF and ICC on a path that is consistent with the principles we have proposed; we then describe alternatives for completing the reform process over the longer term. We intend to monitor the progress of the near-term reforms and adjust course as necessary as we complete the reform process from among the longer-term options.  

We believe the USF and ICC regimes will benefit from simplification and unification: The Connect America Fund (CAP) we propose to create would ultimately replace all other explicit support provided by the current high-cost fund as well as implicit subsidies from the ICC system. To be clear, we are not proposing to eliminate universal service support for communications services in high-cost areas of the country; rather, we are proposing to improve the efficiency and effectiveness of that support.
 
Our reforms must balance a number of other important and possibly competing priorities.  These priorities include advancing broadband service to all Americans; sustaining high-quality, reliable voice service for all Americans; sustaining and expanding mobile voice and mobile broadband coverage throughout the country; increasing adoption of advanced communications services; and minimizing the burden on consumers and businesses, who pay for universal service. We seek comment on the relative importance of these objectives and look forward to developing a full record on the appropriate balance among them.
 
Reform will require all major stakeholders in the USF and ICC system to grapple with the practical consequences of change. We do not propose any "flash cuts," but rather suggest transitions and glide paths that we believe will facilitate adaptation to reforms. Change to USF and ICC policies need not and should not be sudden or overly disruptive, but change must begin so that our country can reach its broadband goals in an efficient and accountable way.
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