FCC votes unanimously for USF overhaul, proposes new Connect America Fund and Mobility Fund

As expected, the FCC has thrown its full weight behind a fundamental rethinking of the Universal Service Fund, a government-backed fund created decades ago originally designed to bring landline telephone service to relatively unprofitable rural areas. Acknowledging the shift from telephone to broadband, the renamed Connect America Fund will receive up to $4.5 billion annually to subsidize broadband build-out to roughly 7 million Americans currently underserved (or entirely unserved) by high-speed data services. It’s not just about landline, though: LTE figures prominently into the equation — particularly in the 700MHz spectrum that can travel long distances between cell sites — and to that end, the FCC has also approved a Mobility Fund that would specifically pour money into mobile broadband across “tens of thousands of road miles.”

The action is expected to add roughly 10 to 15 cents to many consumers’ existing bills, though it phases out on bills above $30 and among low-income customers enrolled in the FCC’s Lifeline program. All told, the funds are expected to pay out over the next six years, with new charges declining in the years thereafter.