Wheeler: Rural Broadband Subsidies Must Be Well Spent

FCC chairman Tom Wheeler says the commission wants to make sure that rural broadband subsidies go only to those who need them.

Wheeler said in a speech to NTCA: The Rural Broadband Association that he is circulating a public notice to the other commissioners Monday "to remind everybody that this support should only be used for its intended purpose – getting communications networks to rural America."

Wheeler said rural broadband is falling behind the curve and it is up to the commission to help get it up to speed.

"It is not acceptable for large swaths of our country to be bypassed by the broadband revolution and the opportunities that it enables," he said. "This is where the FCC can and should to step in to help you serve your communities."

The FCC is in the process of revamping the Universal Service Fund, which provides ratepayer-supplied subsidies for advance telecom.

Wheeler said it was important to weed out abuse because the FCC has a fiduciary responsibility to ratepayers that their money be used efficiently and effectively. "I know you all are doing everything you can to get comparable broadband service at comparable rates to your constituents," he said, according to a prepared text. "I also know that flaws in our universal programs have made transition to a broadband world challenging."

The FCC set 10 Mbps as the baseline broadband speed for USF money as the FCC migrates the fund from phone to broadband, even as the FCC was setting 25 Mbps as the new baseline broadband speed. He caught some heat from critics about that disparity, but he suggested to the audience that that 10 Mbps was a down payment on the faster speeds rural areas would eventually be getting.

"I can’t emphasize enough that this is a minimum, the start of a step-by-step process – we want to support networks that are capable of world-class speeds because that’s what rural Americans deserve."

On the same day that supporters of the FCC's Title II reclassification of broadband (NTCA also backed the commission move) are weighing in with the D.C. federal court in the ISP suit against the new Open Internet order, Wheeler put in a plug for Title II. He said that the "Chicken Littles" who talked about Title II being the end of broadband investment had been proved wrong and the "virtuous cycle of innovation and investment was alive and well."

Wheeler said he had been working with commissioners Mignon Clyburn and Michael O'Rielly on some basic principles for reforming USF as the FCC migrates it to broadband. Those include a reasonable transition period and a budget to insure the money is being well spent, he said.

“The keys are now to make sure any reforms that are made build and sustain upon the successes realized thus far, while also positioning community-based providers to continue investing and delivering high-quality, affordable services in rural areas going forward," said NTCA CEO Shirley Bloomfield in response to Wheeler's remarks. "As an industry that has lived through prior changes that hindered rather than fostered investment, we know firsthand the importance to consumers and communities of both getting reform done and getting reform right. We hold out hope and are working hard with the FCC and other stakeholders to make such reforms a reality.”

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.