FCC's new USF Connect America fund draws different reactions

The FCC finally voted to update the Universal Service Fund and intercarrier compensation systems (ICS) this week, but some service providers think more needs to be done to drive more broadband deployments in rural areas.

Under the provisions of the new Connect America Fund, the FCC has allocated $4.5 billion budget that it says is inteneded to help extend broadband infrastructure to underserved or unserved areas of the U.S.

Over the next six years, the FCC forecasts the new initiative to build out broadband to rural areas will create 500,000 new jobs over the next years.  

As previously announced before, the FCC will also allocate funds to drive mobile broadband via its new Mobility fund.

Not surprisingly, the new initiative, which only took a portion of the group of wireline telcos' previously proposed ABC (America's Broadband Connectivity) plan, drew different responses from Tier 1 and 2 ILECs.

CenturyLink (NYSE: CTL), a Tier 1 ILEC that was part of the ILEC group that proposed their own USF reform measure, was largely supportive of the new reforms.

"While we await the details of the order, we believe the FCC's order will foster the deployment of broadband services to unserved and underserved markets in mostly rural areas,"

Steve Davis, senior vice president of CenturyLink Public Policy and Government Relations, said, "We are encouraged that this order allocates support for the deployment of broadband services in 2012 and possibly 2013, as the permanent cost model analysis proceeds. These funds will assure that broadband deployment in high cost areas continues while the FCC completes its work."

However, TDS Telecom (NYSE: TDS), a telco that serves a diversity of smaller and rural markets believes the FCC's reforms don't go far enough.

"TDS applauds the FCC's initial efforts to modernize and evolve the federal universal service fund (USF) and inter-carrier compensation (ICC) regimes of this country," said Drew Petersen, vice president of external affairs and communications for TDS in a statement. "These efforts are focused on removing waste, network duplication, and abuses in the current system. However, much more is required to incentivize rural carriers, like TDS, to continue expanding and maintaining the high-cost Internet networks necessary to connect rural America."

For more:
- see the release

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