FCC pushes USF Mobility Fund for 3G, 4G mobile broadband buildouts

Published on FierceWireless (http://www.fiercewireless.com)
FCC pushes USF Mobility Fund for 3G, 4G mobile broadband buildouts

By Phil Goldstein
Created Oct 15 2010 – 9:52am
Lost in the kerfuffle of the FCC’s proposed rules on wireless “bill shock” was another action geared to aid mobile broadband deployments. The five-member panel voted 5-0 Thursday to move forward with a plan that will create a “Mobility Fund” to help pay for 3G and 4G mobile broadband buildouts in unserved rural areas.

The Mobility Fund, first proposed in February, is part of the FCC’s national broadband plan. The national broadband plan includes specific provisions to reform the Universal Service Fund, which is intended to help fund the deployment of telecommunications services in rural America.

The FCC said that up to 4 million Americans cannot access 3G service because they live in difficult-to-cover locations, sparsely populated areas or are far from network centers. “The status quo for USF is unsustainable,” FCC Chairman Julius Genachowski said. “The current program is designed to support the communications networks of the past, not the future. It is–we have to acknowledge–filled with inefficiencies. And it is poorly targeted in too many respects, with perverse incentives and the result is that millions of Americans remain unserved by broadband.”

The new fund will use a portion of the USF money that Verizon Wireless (NYSE:VZ [1]) and Sprint Nextel (NYSE:S [2]) voluntarily gave up in 2008. The fund will use between $100 million and $300 million to finance one-time capital infusions for 3G and 4G buildouts in rural areas. Additionally, the FCC proposes a reverse auction to determine which providers get support, which specific geographic areas will receive support, and at what levels.

The FCC’s notice of proposed rulemaking seeks comment on whether to make support available to any unserved area or to target support by making it available in a limited set of unserved areas, as well as what the minimum performance and coverage requirements should be.

Both Republican commissioners, Robert McDowell and Meredith Attwell Baker, expressed reservations about the fund, but said they supported its goals. Both questioned whether the fund will require an expansion in the size of the USF, which many have criticized as being bloated and inefficient.

“I think the way to look at this is that this something of an experiment,” David Kaut, an analyst at Stifel Nicolaus, told FierceWireless. “What they seem to be signaling is, ‘Here is a very definite need. Let’s bring up the areas that don’t have 3G to at least 3G, and if there’s s a good 4G proposal we’ll consider that.'”

Interestingly, Verizon executives recently suggested that the FCC funnel USF money–specifically that tied to the Mobility Fund–to rural carriers that enter into the operator’s LTE licensing program.

You can leave a response, or trackback from your own site.

2 Responses to “FCC pushes USF Mobility Fund for 3G, 4G mobile broadband buildouts”

  1. It seems that the folks at HP are pretty serious about bringing their game to the smart phone industry. With the buyout of Palm already well and done, the time to start focusing on new projects is at hand, and as predicted, HP will need some pretty strong players on their team to keep up with the competition.Former Nokia-MeeGo head Ari Jaaski and Samsung’s Victoria Coleman (who was previously the head of the R&D for the Korean phone maker) are reportedly joining in the ranks of HP’s top ranking officials. Right now, HP has not yet given a public statement regarding their long terms plans for the smart phone industry.But with some rather impressive people on their side, the patents and technologies of Palm (including the famous WebOS), and HP’s long experience in the tech industry, we can expect nothing but some of the best mobile phones ever conceived.

  2. Great post, always enjoy reading your stuff.

Leave a Reply