FCC Panel Says No to Broadband Subsidy

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High-speed Internet-access providers should not receive subsidies from a federal program intended to ensure that essential voice-telecommunications services are universal and affordable, a federal advisory panel said last Thursday.

The recommendation against subsidizing broadband Internet access was made by the Federal-State Joint Board on Universal Service in a 59-page report for consideration by the Federal Communications Commission.

Republican FCC members Kevin Martin and Kathleen Abernathy served on the eight-member joint board, as did Democratic member Michael Copps.

The joint board was charged with examining whether federal law that supports universal telephone service could be interpreted to include broadband. In theory, funding would promote broadband deployment in high-cost areas and allow carriers to charge below-cost rates to consumers.

But the joint panel said that broadband service did not satisfy the legal criteria for inclusion in the universal-service program. The report said a service must, among other things, be "essential to education, public health or public safety" to receive funding.

Copps expressed disappointment in the decision not extend the subsidy pool to broadband.

"I believe that advanced services are essential. Indeed, they are becoming more so with each passing day. Already, broadband is a key component of our nation's systems of education, commerce, employment, health, government and entertainment," Copps said in a statement.

In a statement, Martin said he favored having the FCC collect data regarding the extent to which the universal service program can be used to promote broadband in high-cost, hard-to-reach areas.

"Congress did not envision that services supported by universal service would remain static. Instead, it views universal service as an evolving level of telecommunications services," Martin said.

Although the board rejected subsidies for consumer broadband, it noted that the FCC has required industry to generate $2.2 billion for Internet subsidies for schools and libraries around the country.

Thomas J. Dunleavy, a joint board member from the New York Public Service Commission, said the board had to follow the law and not its own notions of meritorious services that should be subsidized.

"Congress did not give us free rein to provide federal support to whatever service or capability we might personally find compelling," he said in a statement.

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