Move at the FCC to unlink rural broadband subsdies from telephone service

by Steve Blum • , ,

Wouldn’t it be easier to just Skype?

Federal Communications Commission rules require any service provider that applies for broadband subsidies under universal service fund programs also offer telephone service. It’s not because of any law of nature – the California Advanced Services Fund functions quite well without screwing around with dial tone requirements – but rather simply the result of bureaucratic inertia.

The FCC’s decision to bring broadband service and infrastructure under common carrier rules hinted at broadband-only subsidies. Now, commissioner Ajit Pai is proposing to formally change subsidy requirements to allow pure Internet service providers to apply. It will even benefit traditional rural telephone companies, Pai argues, because it will allow them to satisfy cord cutters without losing federal support dollars…

On one hand, they can offer stand-alone broadband—which urban consumers have and rural consumers want—and lose universal service support. On the other, they can deny consumers the option of an Internet-only service, and risk them dropping service altogether (which they increasingly are). The net result is that rural carriers hold back investment because they are unsure if they can deploy the next-generation services that consumers are demanding.

Pai correctly notes that this concept has received bipartisan support in the U.S. congress. And he refrains from slathering on republican talking points, instead going back to the kind of usefully geeky detail that he’s quite good at. It’s a constructive attempt to move the universal service discussion away from the childish partisan sniping that’s marked the debate over common carrier rules for broadband for the past few months.