It’s sad to say it, but the United States has some of the lowest broadband penetration rates of any developed country. To be fair, that’s not entirely the United States’ fault. Compared to countries with very high broadband penetration, like South Korea, Denmark, and France, the United States is much larger and has many more remote, rural areas, far from major urban centers. These are where broadband penetration is lowest, and these are the areas the FCC has recently dedicated significant funding to improving.
In the modern day, access to broadband Internet is incredibly important for pretty much everyone and everything. Broadband internet is increasingly a true necessity to compete in the modern economy, and it plays a key role in education as well; both at the primary and secondary level. So communities who can’t get broadband access, usually because they are in remote areas that aren’t profitable for cable companies to service, are simply left behind.
The FCC is trying to change all that.
Connect America Fund
Starting in 2011, according to USA Today, committed $4.5 billion over six years to provide broadband access to 18 million Americans who simply can’t get it. And, according to the FCC, the latest chunk of that money – $485 million – is in the pipeline as of June 2013.
The FCC’s rural broadband plan, the Connect America Fund, is not a new expenditure. Most of its funding comes from an older 20th Century program designed to bring (landline) phone service to rural areas. Phone service is now ubiquitous, and broadband is more important, so the FCC is re-purposing the old fund.
Here’s how the FCC rural broadband plan works. The FCC itself doesn’t build out new infrastructures or provide service; that’s not in its mandate to become a cable operator. Instead, it works with broadband companies in or near rural areas and creates incentives for them to expand service to new locations. This usually takes the form of direct subsidies to cable companies from the Connect America Fund.
The way those subsidies work increases the total value of the Connect America Fund dramatically. That’s because the FCC doesn’t just hand off millions of dollars to fully fund a company offering service in a new region. Instead, they provide enough of a subsidy that offering new service is profitable for the company, with the caveat that they have to commit to offering service for a certain amount of time.
Most of the expense comes from laying the infrastructure anyway, so once it’s established, maintaining service is not a huge problem. But this way, the FCC taps into hundreds of millions of private dollars using a modest amount of its own money.
And everyone in rural areas benefit from increased broadband penetration. Whether they use the service to secure new high-tech jobs, take classes online, or simply to improve their quality of life with streaming television and online video games, broadband isn’t just the future. It is the present. Rural citizens everywhere will need to quickly learn how to choose a high speed internet provider, because soon, it will be everywhere.
