The USF was implemented as a result of the Telecommunications Act of 1996 and was originally conceived to be assessed on carrier revenue only.

Today, carriers simply pass the expense onto consumers.  The billions of dollars collected are  supposed to be used to help subsidize phone service for schools, libraries, rural health care organizations and low-income subscribers.

USF Reform in the Works

Surprisingly, Federal law still prohibits using any money from the USF to expand broadband services - even in rural areas.

The explosion and consumer craving for high-speed internet services are beginning to raise questions on whether the USF has become outdated and ready for serious reform.

Rep. Rick Boucher (D-Va.), will soon begin working with the FCC to propose changes to allow a portion of the Universal Service Fund to be directed towards establishing a nationwide broadband network.

As chairman of the House Subcommittee on Communications, Technology and the Internet,  Boucher has long pushed for changes to that 1996 program, which guarantees money for the establishment of universal telecommunications services nationwide.

“It is essential that the funds be expended in a manner that helps achieve nationwide broadband deployment, and I look forward to working with the FCC to pass the comprehensive reform legislation that achieves that goal,” Boucher said in a statement.

Deploying broadband throughout the United States is an expensive proposition.   With the USF percentage already at a record high, the idea of using the money to help deploy a nationwide broadband network will surely send it even higher.

Below is an excellent video report and interview with the Chairman of the FCC, Julias Genachowski.

Looks like Google is at it again, but this time in the world of broadband. Google unveiled plans to connect U.S. homes to the internet with lightning-fast service.

How fast you ask?

Try 1 Gigabyte per second fast.  A full ten times faster than Cablevision’s top speed of 100 megabytes per second.

But alas,  the telecommunications world gave but a passing glance to Google’s ambitious plan.  Industry executives were quick to point out that Google has no experience in the slow and labor intensive process of upgrading networks. “If this were easy, everybody would be doing it,”quipped one industry executive.

The key to Google’s plan is replacing what is referred to as the “last mile”, (the copper connection from home to the network) with fiber optics. This task has been daunting for other carriers, however. Verizon has been replacing its copper network with faster fiber-optic cable for the last several years and it is far from completion - even after spending a whopping $23 billion.  Other telecommunications companies are also upgrading their networks, but in a more limited fashion.

Google’s plan is to work with local governments, although a Google spokesman noted that is was too early for the company to “get into the specifics of our deployment techniques.”

Only time will tell whether Google will emerge as a threat to broadband behemoths such as Verizon and AT&T. Judging from Google’s success, (and stock price) over the last decade or so, it might be wise not to bet against them.

Submitted by: TelCon Associates

Wireless carriers are now licking their chops at the thought of tapping into the next big profit center: wireless data transmission.

Text Messaging

The gold rush has already begun in the text messaging arena. Wireless users routinely shell out 10-15 cents (sometimes more) for a message that contains a measly 160 characters of text.

Why do the carriers charge so much for sending text messages? Because they can. Considering that we send about 28.8 billion SMS messages each month in the U.S. (according to wireless industry group CTIA), there’s a lot of money to be made, and when it comes to texting, we simply can’t get enough of it.

Picture and Video Messaging

They say a picture is worth a thousand words (texts?), so getting wireless users hooked on snapping photos of every day life and sending them to friends, family and business associates is a revenue generating no brainer.

And video messaging? Simply bandwidth heaven for wireless carriers. Verizon alone has reported earlier this year that its customers sent or received more 1.1 billion picture/video messages during just the first quarter of 2008.

Customers also completed 34.6 million music and video downloads. On average, Verizon’s wireless customers spent $11.94 a month on data services, an increase of about 33 percent from a year earlier.

Web Surfing

As users become adept at surfing the internet on their cell phones, perhaps text messaging will go the way of 8-track tapes and the 33 RPM record. Video chatting may be the next bandwidth hog and pot of gold for carriers.

Wireless broadband usage has already passed the point of no return.  In fact, 58 percent of Verizon’s retail customers owned broadband capable devices at the end of the first quarter of 2008. Mobile data transmissions accounted for about 20 percent of all wireless sales for the first quarter of 2008, the company said.

Wireless carriers are ramping up for more wireless data demands in the future as well. Verizon spent $9.3 billion on new wireless spectrum licenses in the Federal Communications Commission’s recent 700MHz spectrum auction.

With the rollout of the next-generation of wireless networks (4G) real-time video transmission from user to user may be the next big thing. Handsets, no doubt, will have the ability to send and receive video in real-time, enabling user to chat with family, friends and business colleagues at the touch of a button and from anywhere.

All of this spells one thing for carriers - REVENUE.

The Business Week video below contains more information on the unlimited data plans and the data enriched future of wireless carriers.

The speed was attained in outdoor tests near the carrier’s research and development laboratory in Yokosuka, Japan, in February this year and is the latest step NTT DoCoMo has taken towards a possible commercial launch of the technology early in the next decade.

Dubbed “Super 3G” by NTT DoCoMo, it is one of a number of systems that is included under the “Long Term Evolution” banner of the 3GPP (3rd Generation Partnership Project), the standards setting body for 3G cellular systems, said Shuichiro Ichikoshi, a spokesman for NTT DoCoMo in Tokyo.

DoCoMo stared working on Super 3G in July 2006 as a stepping stone technology to bridge the gap between current HSDPA (high-speed downlink packet access) technology and 4G cellular systems.

The first 3G systems were capable of data transmission at speeds up to 384K bps but can now support downloads in the megabit per second range thanks to HSDPA systems. NTT DoCoMo’s network in Japan currently offers download speeds up to 3.6M bps and from April 1 will support up to 7.2M bps. Such technology is expected to scale up to around 100M bps but there’s a big gap between that point and 4G speeds of 1G bps.

As carriers want to wring out every bit of life possible from cellular networks the commercial launch of LTE should mean that 3G technology is good for a few more years before customers and applications begin demanding faster transmission.

NTT DoCoMo is also looking at 4G systems and has already managed to transmit data at close to 5G bps to a receiver moving at 10 kilometers per hour using 4G technology.

The carrier hopes Super 3G development work will be completed by the end of 2009, said Ichikoshi. That means commercial services, if launched, would begin in 2010 at the earliest.

More details of NTT DoCoMo’s Super 3G tests will be presented at the CTIA Wireless 2008 show that begins in Las Vegas on April 1.