Cable ops rip FCC Universal Service Fund reform proposal

Small cable operators are complaining that an FCC proposal to reform the $8 billion Universal Service Fund will favor telephone companies.

Genachowski

FCC chairman Julius Genachowski said Thursday that the commission's reform plan would allocate $4.5 billion into two funds that could be used to deliver broadband Internet access to rural areas via wired and wireless connections.

While the FCC hasn't yet detailed exactly how it will allocate money from the fund--which telcos and cable operators hope to use to help extend their broadband networks--American Cable Association (ACA) president Matt Polka said the group fears that the USF reform proposal will benefit telcos.

"The chairman's plan locks in a sole-source contract worth billions of dollars for years to a handful of incumbent large telecom companies to deploy broadband at maximum speeds that are below average," Polka said in a statement Thursday. "It favors one small group of providers over others to the disadvantage of consumers. By excluding hundreds of broadband providers willing, able, and eager to compete to provide service to consumers living in rural areas where government support is provided, it will deprive these consumers of receiving the best possible service at the lowest possible price."

For more:
- The Washington Post has this story
- Broadcasting & Cable has this story

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