Rural Broadband Access To Grow, Slowly But Surely

Rural high-speed Internet service is years away and ultimately will require a combination of new phone taxes and billions of dollars more in federal support. Neither will happen easily or quickly, but it's the most likely policy route Washington will take as broadband stretches into rural and underserved areas in the next decade. The first step will be taken by the Federal Communications Commission, which is likely to formally propose broadband taxes in February, arguing that the current Universal Service Fee paid by telephone companies and consumers to provide phone service to rural areas should be expanded and funded at a higher rate to cover construction, development and maintenance of rural broadband services. A broadband tax proposal will spark a fierce battle. Businesses and consumer groups will fight the prospect of higher phone taxes, and deficit hawks will oppose efforts to add tens of billions to the deficit to finance rural broadband connectivity. In the end, though, some combination of the two is likely in advance of actual deployment of rural broadband, a project that will take a decade. The FCC, which strongly supports rural broadband expansion won't specify how much of a tax should be imposed, only that a tax should be the primary vehicle to finance rural broadband. Congress would set a tax rate at a later date after a year or more of hearings and comment at the FCC and in Congress.