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FCC changes put $180M in telecom funding to P.R. at risk

Sen. Marco Rubio (R-Fla.)

Some $180 million that Puerto Rico receives in funding assigned annually through the Federal Communications Commission could be at risk due to the methodologies the agency is implementing to phase out the Universal Service Program and usher in its replacement, the Connect America Fund.

The funding threat is worrying Puerto Rico Telephone, which in an email told News is my Business that despite the efforts made so far, the FCC has ignored local claims.

“We need the support of everyone to question to ensure that American citizens living in Puerto Rico enjoy the same benefits as those living on the continent, especially when we all contribute financially to the Universal Service Fund,” the PRT, which does business as Claro de Puerto Rico, told this media outlet.

The $180 million Puerto Rico received last year from the USF was split between mobile carriers, Worldnet and PRT. The funds are assigned and conditioned on the deployment of network services or network operation services, and are taxable, which is why the benefited companies are also subject to local taxes.

“Puerto Rico will no longer receive millions of dollars for infrastructure development, delaying the expansion of broadband service, which is vital for the island’s economic development,” the carrier stated.

In November 2011, the FCC issued an order to reform several USF programs with the goal of expanding access to high-speed Internet and benefitting consumers by expediting the development of modern telecom networks by investing in poorly or unserved areas. The order created the Connect America Fund, with a $4.5 billion budget.

However, as part of the reform, the FCC is using a cost methodology and assumptions that could leave Puerto Rico without any of the economic benefits currently received.

Fla. senator steps in
During a Congressional hearing last week, Sen. Marco Rubio (R-Fla.), raised his concerns about the fate of Puerto Rico’s consumers to FCC members, questioning why the national broadband plan is not factoring the island as part of the U.S.

“The plan excludes Puerto Rico in terms of determining the broadband availability gap, based on [having] insufficient data,” said Rubio, questioning FCC Chairman Julius Genachowski on it.

In response, the FCC chief said while Puerto Rico is “very much part of our plans,” he said funding has to be made available to be able to reach the island.

Puerto Rico’s broadband penetration level stands at 31 percent, well below the U.S. mainland’s 67 percent average, according to recent figures released by the Puerto Rico Broadband Task Force.

“The more support we can get from the committee on a bipartisan basis to wring savings out of the program so we can get broadband to unserved Americans, the stronger we’ll be and the faster we’ll be able to move,” Genachowski said.

The Obama-appointed federal official said Puerto Rico’s mobile connectivity has “increased very rapidly also supported by some government programs,” there is still an issue with the island’s broadband gap.

“I look forward to working with you on addressing that,” he told Rubio.

Author Details
Author Details
Business reporter with 29 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

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