A lot has happened since my last blog. Steve Jobs passed away. Another CTIA show came and went. And Federal Communications Commission Chairman Julius Genachowski provided an update on the status of Universal Service Fund and intercarrier compensation reform.
In a speech the day after Jobs’ passing, Genachowski noted the considerable contributions of the Apple co-founder and leader to communications and our way of life. The chairman then went on to talk about how the FCC aims to continue to move connectivity forward via the transition of the USF to the Connect America Fund, the creation of a Mobility Fund, and changes to intercarrier compensation.
Through the Connect America Fund, he reiterated, the FCC aims to ensure “universal availability of robust, scalable and affordable broadband to homes, businesses, and anchor institutions in unserved areas.”
This funding, Genachowski said, should be targeted exclusively at areas without an
unsubsidized competitor. The chairman also talked about the FCC’s desire to “introduce competitive processes among providers for obtaining support and transition over time toward a fully competitive system for distributing Connect America Fund dollars.”
The end goal is to bring broadband to the 18 million Americans who can’t get it today, with near-term buildouts to hundreds of thousands of consumers starting in 2012, and millions more unserved Americans within the following five years, he said.
As for the Mobility Fund, that aims to bring mobile broadband “to more than one hundred thousand road-miles, where millions of Americans live, work, and travel,” he said. The FCC chairman explained that this effort will be “a one-time shot-in-the arm to accelerate deployment of 4G networks” (not sure what the injection is in this case) and then to focus over time exclusively on supporting rural mobile broadband. And he said that the new Mobility Fund would see competitive bidding in its first phase, in 2012.
As for intercarrier compensation reform, Genachowski said the FCC hopes to close loopholes that allow for “phantom traffic and traffic pumping, and other arbitrage schemes like CMRS-in-the-middle, where some carriers divert wireline traffic to wireless networks to avoid paying intercarrier compensation charges.” He added that such reform also will create more certainty relative to compensation related to VoIP traffic.
I’m not sure about the details of all of the above, or who stands to win or lose from it. But journalist/consultant Gary Kim in a recent TMCnet piece wrote that he expects the largest tier one providers to be happy with the FCC’s proposals, while mid tiers will be ok with it, and rural telcos will not be jazzed.
Wireless carriers probably also have an opinion on all this, although the opening and second-day keynote speakers at CTIA earlier this week didn’t touch on the topic, nor did anyone in any of the 20 interviews I conducted in San Diego.
However, it is notable that this is the first instance in which the FCC has talked about providing funding specifically for mobile broadband. While some wireless operators or wannabes are probably happy to hear that, this could backfire on the wireless industry by putting a spotlight on mobile broadband. Clearly, mobile broadband is already very much in the spotlight given growing user demand, the popularity of the iPhone and iPad and other wireless connected devices, and the seemingly ubiquitous ads about ever-faster wireless networks. But just recently we’ve been hearing calls from Washington seeking a definition of 4G, and that adds another interesting twist to the conversation.