As Landline Use Wanes, FCC Moves Funds To Broadband

As expected, the Federal Communications Commission voted today to revise an $8 billion funding program by shifting subsidies from companies that provide telephone service to broadband providers.

The move is aimed at increasing the availability of broadband in rural areas, where an estimated 24 million people lack high-speed Web access -- while virtually all U.S. households have access to telephone service.

Given the increasing importance of broadband as a communications platform, shifting resources to Web networks makes a good deal of sense. As the FCC noted, landlines are no longer seen as the essential service they were even 10 years ago, For one thing, people increasingly are relying on cell phones; at last count, an estimated 25% of U.S. households had shed landlines in favor of wireless only-voice service. Additionally, people with broadband connections can obtain telephone service through voice applications.

The FCC's unanimous vote drew praise from some observers, including Senate Commerce Committee Chairman Jay Rockefeller (D-W.Va.) -- though companies that provide landline service to rural communities likely won't be happy.



Meanwhile, another FCC initiative relating to broadband -- the agency's new net neutrality rules -- continues to draw controversy. Fred Upton (R-Mich.), chairman of the House Energy and Commerce Committee, reportedly said that he anticipates that Congress will move with a plan to nix the new open Internet rules.

Those rules, which the FCC approved in December, ban all broadband providers -- wireline and wireless -- from blocking traffic, and prohibit wireline providers from engaging in unreasonable discrimination.

Congress has the power to vacate the FCC's regulations, but only if a majority of the House and Senate vote to do so within 60 days of the regulations' official publication. The FCC has not yet published its order in the Federal Register, but is expected to do so soon.

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