6 Phone Companies Propose Nation-wide Broadband Deal

The Federal government has been encouraging the expansion of broadband internet into rural areas, which do not currently have broadband internet access available. Since many internet service providers are also phone service providers, the top six communication providers approached the FCC with a plan that may help finance that rural expansion on July 29, 2011.

The proposal presented by AT&T, Verizon and four others suggests that the FCC could use funds already being collected from them to help finance the internet expansion. The funds in question are collected from telecommunications companies based on their revenues and fund the Universal Services Fund, which was created by the FCC.

The Universal Services Fund consists of four different programs: High Cost, Low Income, Rural Health Care, and Schools and Libraries Program. The High Cost, Rural Health Care and Schools and Libraries Programs are all aimed at providing rural areas with telecommunication services at costs that are relative in price to those available to urban areas. The close association and intent of these programs to rural expansion of broadband internet is the argument being used by the telecommunication companies to persuade the FCC to designate some of these funds in that direction.

The Schools and Libraries Program is already helping to provide funding to bring affordable internet access to rural schools and libraries. The High Cost program has been directed at keeping rural phone service affordable for residents, and the Rural Health Care program has helped fund communication services for rural hospitals and clinics. To incorporate the expansion of broadband internet services into these programs is just a natural upgrade to current needs, according to the argument provided by the telecommunication companies.

The Low Income portion of the program is one area that did not have a specifically rural focus. This program was targeted on low income families and individuals. The goal of this program is to make basic telephone services more affordable to homes without telephone service. They do this by providing discounts on local telephone service and also by now providing free cell phones with 250 free minutes each month.

It is this free cell phone program that seems to have taken the headlines, since the media began shining the spotlight on the Universal Services Fund. In a recent article TCMnet.com questioned the statement made by a representative of one of the free cell phone providers, that the low income recipients had the ‘right to peace of mind’ that would be provided by their no-cost cell phones.

In a time when the federal government has been arguing about where to cut spending, this program is definitely one that will be looked at very closely.  For some households, cell phones sit in the hands of every child and each of the parents, but other hardworking families choose to forego the luxury of instant-everywhere communication. It can be hard to explain to these families why the government is collecting money from their phone company to help pay for someone else’s free cell phone.

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