FCC to tap the Universal Service Fund to bring 3G to rural areas

The FCC voted unanimously to allocate a portion of the Universal Service Fund into its new Mobility Fund. This new Mobility Fund is meant to fund projects that will bring 3G mobile broadband to rural markets that traditionally lack 3G coverage.

Created in 1997, the Universal Service Fund was formed to help bring advanced telecommunication services to areas that lack or can not afford these services. The Universal Service Fund targeted rural, low income, and high cost areas and funded companies willing to bring affordable service to these traditionally overlooked markets.

In recent years, the Universal Service Fund has been the subject of much controversy due to fraudulent funding practices. One step towards the reform of this $7 billion fund is the creation of this new Mobility Fund which will take a $100 million to $300 million dollar chunk of the Universal Service Fund and use it to bring 3G coverage to those areas that lack it. Companies will be awarded this money via a reverse auction where they will bid for projects using the smallest amount of funding needed to service an area.

The FCC is asking for public comment on the target markets for this Mobility Fund. Should the FCC target specific problem areas with their funding or should they open it up to any rural market that lacks 3G coverage?  The government body is also seeking guidance on the minimum proposed coverage requirements and performance levels necessary to receive funding. This latter issue arises from the current abuse of the USF where companies have collected millions of dollars in funding each year to service a disproportionately small number of customers.

Verizon Wireless has already filed a request with the FCC to snag a portion of this Mobility Fund to help it roll out LTE to rural markets. This money would be given to small regional carriers who are leasing Verizon’s 700MHz spectrum and offering LTE in rural areas. The Rural Cellular Association has voiced its opposition and asked that the FCC not bolster Verizon’s already strong rural wireless network. From the looks of it, bringing mobile broadband to rural customers will be a long and messy road.

[Via PC World]

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