Tuesday, November 1, 2011

The FCC Still Playing Catch-Up

Last week the FCC officially ended the Universal Service Fund, which subsidized traditional phone service, and replaced it with a new fund to subsidize broadband. The FCC bigwigs hailed the change as a history-changing decision.

Unfortunately, it’s not.

Yes, the change was needed. The Universal Service Fund was no longer a viable option because it focused on voice service. But the FCC move is still essentially subsidizing the large carriers, only this time so they can build out more rural broadband capabilities. The problem is that the changes, though positive in spirit, will likely have little impact.

The new fund requires that carriers build out a system that enables 4 Mbps downstream and 1Mbps upstream capability. That’s anything but fast. For the rural broadband user the new regulations are supposed to help, that kind of speed isn’t enough.Four down and one up is already borderline obsolete. Those requirements are also curious when you consider that rural broadband models currently exist at five-to-seven times that speed. The capability is there.

The main argument for rural broadband access is that extension of the networks to the underserved areas will open up economic opportunities. Studies already conducted indicate that outcome is unlikely. As much as someone might enjoy living the rural lifestyle, businesses still need to be able to compete. Old technology isn’t going to spur entrepreneurial ventures and job creation.

So what’s the solution? Is it increased governmental change? Or is it wiser to bet on the private wireless and cloud-based providers? Considering it took years to dissolve the Universal Service Fund, I’d put my scratch on the leaner organizations.

Labels: FCC, Fixed Wireless Broadband, Rural Broadband