Politico reports that the Aleutian village of Adak, established as a base in World War II and now home to about 300 residents, may soon find its high-speed Internet connection threatened by changes in the way the FCC subsidizes broadband connections.
Adak is currently being serviced by Windy City Cellular. In 2011, the company received a whopping $136,344 a month in federal subsidies to contain costs. But in January, the subsidy was reduced to a comparatively paltry $22,356, a drop of 84 percent. Even worse, the cutback was effective immediately.
The FCC is changing the way it subsidizes communities like Adak, as it transitions from an old Universal Service Fund to the new Connect America Fund. The Universal Service Fund subsidized traditional phone service, whereas the Connect America Fund focuses on broadband-based subsidies. The old program's cost was out of control until the FCC revamped it in October. While the FCC is aware that some communities will be hurt, it hopes the reforms will ultimately bring more good than harm. "We are mindful that these reforms may have an impact on some of these companies," FCC Commissioner Mignon Clyburn told Politico. "But any money extracted from the fund through the waiver process means there is less money to go around for the other 18 million people that we are trying to get served."
Currently, Windy City Cellular has filed a petition for additional funds; the FCC has agreed to fund the company $40,000 for the next three to six months while it considers the petition. If Windy City Cellular is unable to receive additional funding, it may find itself out of business.
Read much more on the travails of Windy City Cellular here.
Read more on rural broadband projects in Alaska here.