FCC shores up rural phone service

Financial support for rural phone suppliers was ensured for another five years Thursday when the Federal Communications Commission extended and modified the universal service subsidy program. The FCC approved a system that relies on historic costs to predict future costs of providing service in high-cost, typically remote areas.

FCC Chairman Michael Powell said he was "pleased" with the order but said instead of this interim plan he would have preferred a permanent one based on "forward-looking" costs. The universal service program is funded by fees attached to consumer phone bills, and Powell said "we must guard against allowing universal service programs to grow too large." Departing Democratic Commissioner Susan Ness said she'd like to see the program grow to help rural communities receive broadband, similar to how the E-Rate program is bringing broadband to schools and libraries.