FCC Poised to Restructure Universal Service Fund

This is big:

The federal government spends more than $4 billion a year, collected from phone bills, to subsidize phone service in rural and poor areas. Now, it's considering ways to give those places more for the money: high-speed Internet connections instead of old-fashioned phone lines.

The Federal Communications Commission is set to vote Tuesday to begin work on a blueprint for transforming a subsidy program called the Universal Service Fund to pay for broadband.

This is a big deal and an important shift in emphasis. Right now, of course, we still need to invest in rural telephony. But it seems likely that the continued structure of the USF may in fact provide disincentives to expanding broadband service. Providers receive federal subsidy to (re)invest in conventional wireline service. But the FCC has proclaimed that broadband will be the telecommunications platform of the future; restructuring the USF is a step toward realizing that vision.