May 16, 2013 - 11:44 am
By Julie Veach | Deputy General Counsel

The Connect America Fund is the FCC’s 21st Century solution to expanding broadband to unserved areas of rural America.  One reason why the Connect America Fund can stay within a budget as it accomplishes this task – while continuing to support traditional voice service as its 20th Century predecessor program did – is because we are targeting the right amount of subsidies to the right places: places where help is needed the most. The old universal service fund did little to protect against unneeded subsidies. Developing ways to stop this fiscal waste was a major focus of our 2011 Connect America reforms.

We are well on the way to implementing these reforms, including making initial decisions on a Cost Model that will calculate what level of support is needed, down to the Census block level.  Today, we’re adopting another set of policies to make sure that we don’t support providers in Census blocks where another provider is delivering service without subsidies.

It’s fiscally prudent to reserve the Fund for areas where there’s no business case to serve consumers. And it’s common sense that in areas where a provider delivers voice and broadband without subsidies, a business case has been made.  Moreover, giving subsidies to one provider and not the other is unfair.

So accounting for unsubsidized providers is critical as we distribute support for rural voice and broadband in this phase, Phase II, of the Connect America Fund.  Here’s how we are going to do it.

First, we tap data in the National Broadband Map to find the presence of unsubsidized providers that deploy fixed, land-based technologies such as cable, fiber, DSL, or fixed wireless providers like WISPs (wireless Internet service providers).  We then will check if these competitors also provide voice service. We will use that information to publish an initial list of census blocks presumed to be lacking an unsubsidized provider  – and therefore potentially eligible for the Connect America Fund.

Of course, these presumptions may not always be right.  So we have crafted a formal challenge process that will expedite resolution of disputes. This framework includes collecting specific and consistent information, on a form, of facts and evidence ranging from census tract identifiers to advertisements for service and customer data.  The Bureau will collect those challenges, review to ensure evidence is provided, and issue a Public Notice seeking rebuttals. A final list will be published once analysis of the comments is complete.

By establishing a prompt, fair, and open challenge process on this fiscally responsible feature of the Connect America Fund, we will connect the rest of rural America to broadband quickly and efficiently.