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FCC expands USF-to-broadband transition

The Federal Communications Commission on Thursday continued its work to transition the federally administered telephone subsidy to cover broadband access.

Last month, the FCC advanced reform of the Universal Service Fund by initiating a proceeding to revamp the so-called high-cost fund for rural service, the most expensive component of the $8 billion Universal Service Fund.

Today, the commission voted to begin the process of overhauling the Lifeline/Linkup program, which provides subsidies for telephone service for low-income Americans, to transition toward broadband.

"Broadband is at least as crucial to full participation in our society and economy in the 21st century as telephone service was in the 20th," FCC Chairman Julius Genachowski said at today's meeting.

The reforms proposed today would not eliminate the telephone subsidies altogether, but rather impose new accountability requirements and stricter eligibility criteria in an effort to eliminate waste, fraud and abuse. The savings would then be shifted over to subsidize broadband service to prevent the overall fund from swelling.

The notice of proposed rulemaking adopted today also contemplates setting a temporary or permanent cap on the program, a measure Democratic Commissioners Michael Copps and Mignon Clyburn warned against implementing ahead of firm data on the extent to which low-income households would rely on the program for broadband and telephone service under the pending rules.

"How can we intelligently cap a program when we don't know how much meeting the challenge is going to cost in the first place?" Copps said.

Despite those reservations, Copps and Clyburn both supported the order, which passed by a unanimous vote.

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