Justifying Rural Goals in the National Broadband Plan

On May 28, Members of Congress wrote to Federal Communications Commission Chairman Julius Genachowski raising concerns about the National Broadband Plan's impact on rural America.

Some feel the plan exacerbate a urban-rural digital divide since it sets as goals of broadband at 100 megabits per second (Mbps) for 100 million homes, but also moves to transition the universal service fund to support broadband offerings at 4 Mbps. The practical impact is two very different goals for rural regions and more densely populated areas. Establishing such a low threshold for rural residents and businesses has the potential to hinder their ability to share in the transformative vision for broadband outlined in the plan. Further, it could impair the ability of telecommunications carriers to make investments necessary to deploy broadband services in our most rural areas.

On October 13, Chairman Genachowski replied with the reasoning behind the 4 Mbps goal which, he says, "represents one of the highest levels in the world today for universalization." Cost is a major factor. Subsidizing universal 100 Mbps deployment today could cost as much as $320 billion, which could increase the size of the universal service fund to $40-50 billion annually, and lead to a universal service fee. on average, of $30 per month per American household.