Rural Broadband: Overcoming Obstacles and Achieving the Vision

As part of the National Broadband Plan, the Federal Communications Commission must realize that in many rural areas of the country broadband infrastructure is so costly to build relative to the revenues that it will generate, that no rational business case can be made for private entities to make such investments. Thus, explicit government support will be necessary to deliver broadband to all Americans. Rural wire/fiber-line carriers are building networks employing a hybrid fiber/copper technology that, in addition to providing basic telephone service, are also enabling the delivery of high-speed Broadband service to millions of rural consumers. Building and operating these networks has been made possible by a combination of explicit support provided by the Universal Service Fund (USF), and implicit support provided through Intercarrier Compensation (ICC). On average, USF and ICC provide over half of network cost recovery for rural carriers, and even higher percentages in the most rural areas. The current USF and ICC regimes are based upon voice-service metrics that are not sustainable in an increasingly Broadband world. Fundamental reforms in both programs will be necessary to continue the delivery of Broadband services to current customers and expand Broadband delivery to unserved and underserved rural communities. Without fundamental reform of the USF and ICC systems, rural ILECs (RLECs) face the realistic possibility of a financial collapse that would be devastating to the rural consumers that they serve, and extremely harmful to the achievement of the Nation's Broadband goals.