FCC To Connect Rural America To VoIP

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The potential market for VoIP phone service in rural America is about to explode, the result of a unanimous action by the FCC last week establishing the “Connect America Fund.” The fund, toting up to a healthy $4.5 billion per year, will be used to bring broadband to an estimated 7 million rural residents.

As the where the money is coming from, that’s hardly a secret. It is the cash from the long-standing (and soon to be history) Universal Service Fund (USF) – no new taxes or sources of revenue are involved. The key point is that the USF had been used to bring traditional TDM-based phone service to places where it would otherwise be uneconomical.

As to be expected, between the worldwide focus on Occupy Wall Street, the situation in Greece, and the continuing issue of unemployment, little attention has been paid in the general press to the creation of Connect America. But it wasn’t so long ago that bringing broadband to all Americans was an issue of public interest, as well it should be.

Now, with the cash to be spent bringing broadband to those places where it hasn’t been economically possible before, the business opportunity for VoIP phone service providers such as Phone.com will be growing. And of course unlike TDM which is voice-only (okay, there are the old acoustic modems), IP-based broadband carries with it the promise of both high speed data and VoIP-based phone service.

Of particular interest, in rural America business tends to be small – just the right size for small business phone service such as Phone.Com’s Virtual Office to be particularly attractive.

Admittedly, it is possible that one player or another in the industry – most likely a “traditional” phone company – could appeal the FCC’s action, and hold things up. But notably it was a unanimous FCC vote, which means bipartisan, which in and of itself says something these days.

Stuart Zipper is currently a contributing editor to Communications Technology, a high tech business journalism consultant and freelancer, and the past Senior Editor of TelecomWeb news break