[JURIST] The Federal Communications Commission (FCC) [official website] announced comprehensive changes on Thursday to its national communications subsidy program to make high-speed internet access available in rural areas [press release, PDF]. The Connect America Fund [official website; executive summary, PDF] will have an annual budget of USD $4.5 billion, and the FCC estimates that the program will create more than 500,000 jobs while providing high-speed Internet access to more than 7 million Americans. The FCC described the previous system, the Universal Services Fund [official website], as “broken.” The new program also makes mobile broadband “an independent universal service objective for the first time in history” and reforms intercarrier compensation to eliminate hidden costs in bills. FCC chairman Julius Genachowski called this a “once-in-a-generation overhaul” [text, PDF]:

We are taking a system designed for the Alexander Graham Bell era of rotary telephones and modernizing it for the era of Steve Jobs and the Internet future he imagined. We are reaffirming for the digital age the fundamental American promise of opportunity for all. We are furthering our national goal of connecting the country to wired and wireless broadband. And we are helping put America on its proper 21stcentury footing, positioning us to lead the world in a fiercely competitive global digital economy. Infrastructure has always been a key pillar of American economic success, with telephone and other infrastructure connecting consumers and businesses, facilitating commerce, and unleashing innovation. Broadband is the indispensible infrastructure of our 21stcentury economy.

The commission argued that high-speed Internet has become a necessity and thus all Americans should have access to it. Over 80 percent of Fortune 500 companies only post job openings online and studies have shown that students with access to broadband at home graduate at a rate of 6 to 8 percent higher than children in homes without access to broadband.

The FCC has faced controversy when it comes to regulating the Internet. Verizon and MetroPCS [JURIST reports] filed challenges in January out of concern over the FCC’s broad authority under its new net neutrality rules. Last year, US Senator Jim DeMint (R-SC) [official website] introduced legislation [JURIST report] intended to block the FCC from implementing its National Broadband Plan [official website; materials]. The Freedom for Consumer Choice Act would remove the FCC’s ability to declare the actions of a communications provider illegal unless there was a clear showing that the practice causes harm to consumers and will not be corrected by market forces. A month earlier, the FCC opened a new proceeding [JURIST report] to identify the legal approach that will best support its efforts to develop universal access to “high quality” Internet broadband services. A previous court ruling found that the FCC lacks the power to enforce net neutrality [JURIST report]. Net neutrality is thought by supporters to be essential to the goal of an open flow of information over the Internet regardless of the amount of revenue generated by the information.