The FCC adopted an official reform order for establishing the Connect America Fund, which replaces the outdated universal service and intercarrier compensations systems.
The Connect America Fund has the following mission: (1) preserve and advance universal availability of voice
service; (2) ensure universal availability of modern networks capable of providing voice and
broadband service to homes, businesses, and community anchor institutions; (3) ensure universal
availability of modern networks capable of providing advanced mobile voice and broadband
service; (4) ensure that rates for broadband services and rates for voice services are reasonably
comparable in all regions of the nation; and (5) minimize the universal service contribution
burden on consumers and businesses.
CAF will eventually replace all of the existing high-cost support mechanisms. The annual funding target is set at no more than $4.5 billion over the next six years. The goal is to help make broadband available
to homes, businesses, and community anchor institutions in areas that do not, or would not
otherwise, have broadband, including mobile voice and broadband networks in areas that do not,
or would not otherwise, have mobile service, and broadband in the most remote areas of the
nation.
The CAF plans to adopt incentive-based, market-driven policies, including competitive bidding, to distribute
universal service funds more efficiently than previously.