FTTH Council to FCC: Preserve USF 'High Cost' fund

The Fiber to the Home Council (FTTH Council) has told the Federal Communications Commission (FCC) that the “High-Cost” portion of the Universal Service Fund (USF) is essential to rural telecommunications providers and should be maintained. The opinion, contained in a 37-page filing with the Commission, comes as the FCC ponders how to stimulate broadband penetration and use in the United States.

As a means to fund additional broadband infrastructure, the FCC has proposed a reduction in the High-Cost USF allotment in favor of a “Connect America Fund” (CAF). The FTTH Council asserts that many rural telecom providers rely on the High Cost fund – both directly and as a means to acquire loans – to improve broadband services within their potentially underserved areas. Conversely, the CAF would only target unserved areas – and at a level the FTTH Council charges will be generally below what is available in most urban and suburban communities.

The CAF would fund connections that would support 4 Mbps downstream and 1 Mbps upstream. However, the FTTH Council cited research that predicts that consumer demand for symmetrical bandwidth will “easily” surpass 25 Mbps within five years,

The FTTH Council says it isn’t against the establishment of the CAF. However, it believes the goals of the FCC and the CAF would be better served by combining the CAF with the existing High Cost USF funds. In this way, broadband would arrive for unserved areas, while the 8 million to 10 million people who live in areas where broadband providers receive High Cost fund support could hope for improved services.

The FCC included the Connect America Fund in its National Broadband Plan, which it delivered to Congress on March 16, 2010. Among other elements, the National Broadband Plan called for revisions within the USF. The FCC established a notice of proposed rulemaking and a notice of inquiry the following month in which it described the High Cost fund as a successful program but a limited tool for increasing broadband penetration.

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