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FCC Releases First Funds in USF Broadband Transition

The FCC Wednesday officially launched its Connect America
fund, an expansion of its phone subsidy program to broadband support, which is
part of its long-term National Broadband Plan.

The FCC voted last fall to reform the Universal Service Fund
with an eye toward freeing up money to help migrate phone subsidies to
broadband subsidies, where all the telecom action is these days.

In this first phase of funding, dubbed a "transitional
mechanism to distribute high cost universal service support to price cap
carriers," phone companies have 90 days to take the money and run with its
aggressive build-out requirements. The FCC is expecting those companies to be
spending some of their own money as well to help extend broadband to rural
"unserved homes and businesses."

The initial outlay is estimated to deliver broadband to up
to 400,000 homes and businesses.

The announcement comes only two days before the FCC plans to
launch the next phase in reforming the Universal Service Fund, which is to seek
comment on how to  "reform and modernize" how the funds are assessed and
collected.  Telecom carriers pay into the fund -- and pass that fee along
to customers -- to subsidize phone-now broadband service -- where there is not
a business case for it.