Fewer phones, more broadband: FCC struggling to fix USF

A divided Federal Communications Commission has put a cap on Universal Service Fund (USF) payouts, but even the agency's majority calls it a stop-gap measure for a program in serious trouble. The cap on USF subsidies will exempt telecommunications providers operating on tribal lands in the contiguous United States and in Alaska Native regions. The FCC says that the ceiling will remain in place only until the agency enacts far reaching reforms on the USF program. But it is unclear when that will happen, given the chaotic nature of the Commission's decision making process on this issue. Most analysts agree that the USF has to move from subsidizing conventional telephone service to helping extend broadband use to the nation's low-income and rural consumers. The Benton Foundation, among other groups, has been pushing this issue for some time. The nonprofit argues that a general transition to VoIP telephony would save consumers billions of dollars in the long and even short run. Benton calls for the FCC to establish a five-year timetable from analog to digital telephony—"with a hard analog shut off date." This would be similar to the impending DTV transition deadline of February 17, 2009.
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