April 22, 2013 - 1:11 pm
By Julie Veach | Chief, Wireline Competition Bureau

The FCC reached another milestone today in its implementation of Universal Service reforms to ensure rural Americans have access to voice and robust broadband services – including extending broadband to the millions of Americans that are unserved today. 

Our primary tool to achieve this goal is the transformation of the former high-cost fund – the program supporting rural voice service – to a Connect America Fund supporting modern networks that provide both broadband and voice service.  Phase II implementation is well underway for those areas of the country where 80% of unserved Americans live and key to this transformation is targeting funding efficiently to the areas where it is needed most, outside areas where competitive providers operate. With our last Broadband Progress Report, we posted an online map of broadband service today, including the unserved areas where 19 million Americans live.

Today’s milestone – a Report and Order– is the next step toward adopting a final cost model that will pinpoint as accurately as possible how much support is needed, on a granular (census- block) level, to deliver both voice and broadband, without overspending.  The model framework – an “efficient provider framework” – adopted by Commission staff today resolves key assumptions about the design of the network and network engineering, including by:

  •        Calculating costs in a way that best approximates the discipline of competitive markets with multiple providers.
  •        Building on the known costs of deploying efficient modern networks.  These costs can be lower than those of legacy  networks, often built in a piecemeal fashion that compounds inefficiencies.
  •        Looking forward to the average monthly cost that is necessary to support modern, efficient networks over the long-term, rather than attempting to model past investments in legacy networks.

This framework was constructed with the input of many to ensure sufficient support for rural networks, while being fair to the American consumers and businesses that pay into the Connect America Fund.  This efficient provider approach results in more reliable cost estimates than other methods parties previously proposed. 

We look forward to continued public input as we finalize this model in order to implement Phase II of the Connect America Fund in the coming months.