There is nothing quite as contentious as any proposed changes to current intercarrier compensation or universal service programs, even though many would argue the programs no longer work very well.
The U.S. “Connect America Fund” represents billions of dollars worth of support for broadband suppliers in unserved and underserved rural areas. As you would expect, potential suppliers are going to fight over those funds, including the matter of eligibility. One clear fight is between some fixed line providers on one hand and wireless providers of several types, including satellite providers, mobile providers and fixed wireless providers as well. But there also is contention between fixed line providers.
Independent rural telcos have complained that a disproportionate amount of those underserved areas are served by AT&T and Verizon (News - Alert) Communications, preferring that funds be earmarked only for smaller and independent companies and cooperatives. Satellite providers in the United States and Europe think they should be eligible providers.
Separately, European satellite broadband providers are lobbying the European Commission to provide public funding for the rollout of satellite broadband across Europe.
At a conference held by the Association of Telecommunications and Value-Added Service Providers, industry stakeholders said that satellite was the only form of broadband provision to offer universal coverage, patching the holes left by other solutions, such as fixed networks and mobile broadband.
In the United States, Dish Network Corp., Hughes Network Systems, ViaSat (News - Alert) and WildBlue Communications (ViaSat) argue they should be allowed to apply for Connect America Fund projects.
The CAF aims to fund the deployment of broadband to about 100 million people who are without it. The plan is to phase out the Universal Service Fund and the current intercarrier compensation regime starting in 2012, shifting the money into the CAF.
The FCC (News - Alert) currently defines broadband as 4 Mbps downstream and 1 Mbps upstream. Fixed line proponents say that is not nearly fast enough. Satellite providers say they already have plans to launch new satellites that will allow them to support higher speeds for consumer users and represent the most-affordable way to quickly get broadband access to underserved and isolated locations very quickly.
Satellite executives also tend to say that satellite is a workable and affordable solution for those locations where the cost of terrestrial access is prohibitively expensive, not a universal substitute for cable modem, digital subscriber line or fiber to the home access. In fact, satellite executives do not have a problem saying that where a customer can buy fixed access, they should buy it.
The point is that there always will be some percentage of locations so remote that broadband service by a fixed network is not economical, and that satellite access makes better use of finite resources in those cases.
To be sure, neither voice nor broadband service in isolated areas is easy. Without various forms of government subsidy, it is unlikely many locations would ever be able to support service on strictly commercial terms. The issue is how to get the greatest return for a limited amount of support.
But that necessarily requires balancing the competing interests of satellite, rural telco, rural cable, big telco, mobile and fixed wireless providers, all of whom can claim they have solutions that will work.
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Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.
Edited by Jennifer Russell