FCC Rural Broadband Plan Costs US $115 Million

The U.S. Federal Communications Commission (FCC) now says it will help bring broadband Internet service to 400,000 Americans who currently don't have access to high-speed Internet. The program to subsidize networks in rural areas will cost $115 million in public funds.

The aim of the Connect America Fund is to subsidize the installation of high-speed Internet cables in remote places where doing so is not profitable for private firms.

The money will come from the Universal Service Fund. In the past, this fund was spent on subsidies to make sure every American home had telephone service, but this is no longer considered a major problem.

Three-Year Time Limit For Government Subsidies

Broadband providers will receive the new money on two conditions: First, that they add their own funds to the government investment; and second, that each local expansion project using the government money be completed within three years.

So far, projects in thirty-seven states have received the 'thumbs up' for this funding.

If all goes well, additional funding will be available in the future. The FCC says it has set a target of making sure seven million people currently without broadband get service in their area within six years.

There's also a long-term goal that every home in the country have high speed Internet access by 2020. That will be a major undertaking, as an estimated 19 million people are currently not served by broadband. (Source: fcc.gov)

FCC: Spending Not a Waste of Public Cash

Government officials say using public money for these projects is justified because of the benefits to society when more people get broadband access.

The high speed service makes it easier for people to start online businesses, and can also allow more government services to be moved online, potentially saving public money. (Source: thenextweb.com)

Critics of this and previous subsidy schemes claim there is too much bureaucracy involved in these programs, and that the money in these programs will be wasted.

The FCC says reforms to the processes used to distribute the money will insure more effective spending, and better oversight will make sure the government gets good value for every dollar.