STATEMENT OF
CHAIRMAN JULIUS GENACHOWSKI
Re: In the Matter of Universal Service Reform, Mobility Fund, Notice of Proposed
Rulemaking, WT Docket No. 10-208. 
Today we take the next significant step in reforming and modernizing the Universal 
Service Fund, to update for the 21st century our national commitment to bringing the benefits of 
modern communications to all Americans.  
Moving forward on the Mobility Fund implements another key recommendation of the 
National Broadband Plan.  The Broadband Plan recognized the need to expand access to mobile 
voice and broadband in those areas of our country where it will make the biggest difference.  We 
propose doing so in a way that harnesses the power of the market to ensure efficient government 
spending. 
Consistent with the principles of fiscal responsibility that will guide all our efforts on 
universal service reform, we will promote our universal service goals without increasing the size 
of the Universal Service Fund or the burden on American consumers, who ultimately support the 
Fund.
USF has brought many benefits over the years.  This public-private partnership has 
brought affordable telephone service to virtually all reaches of our country, strengthening 
communities and our economy.  
But the status quo for USF is unsustainable.  The current program is designed to support 
the communications networks of the past, not the future.  It is – we have to acknowledge – filled 
with inefficiencies, providing, for example, annual subsidies of more than $10,000 a line to 
carriers serving communities where there are unsubsidized competitors.  And it is poorly targeted 
in too many respects, with perverse incentives and the result that millions of Americans remain 
unserved by broadband.
Representatives Rick Boucher and Lee Terry were right when they said: “The Universal 
Service Fund is broken.”
At the same time, USF’s mission of making sure all Americans have access to 
communications services at reasonable rates remains vital.  Broadband Internet is supplanting 
telephone service as our basic communications platform, and it is essential for full participation in 
our digital economy and 21st century democracy.  Yet today, up to 24 million Americans in the 
rural areas served by USF are shut out of the broadband future – either fixed or mobile.  
The Universal Service Fund can’t continue moving in the wrong direction.  Today’s 
action begins to right its course.  The pro-consumer, pro-market Mobility Fund will begin closing 
the “mobility gap”: the millions of Americans living in communities that lack current-generation 
mobile service or, even worse, any mobile service at all, and millions more who work in or travel 
through these areas.  The Mobility Fund will also create jobs and fuel economic growth, 
particularly in rural communities.
Here are three key things people should know about the Mobility Fund:
First, in addition to tackling serious mobility gaps, the Mobility Fund is fundamentally 
about spending limited resources more wisely.  The Fund uses existing universal service funds 
recovered from Verizon Wireless and Sprint, which were receiving duplicative subsidies to serve 
areas with other mobile voice providers.  Verizon Wireless and Sprint surrendered this support as 
part of FCC-approved transactions, and we will be targeting those funds to areas that truly need it.
Second, the Mobility Fund demonstrates our commitment to using market forces to 
discipline government spending.  We propose using a market mechanism – reverse auctions – to 
identify the areas where we can get the most bang for the USF buck, and to identify the lowest-
cost provider in those areas.  The Mobility Fund will unleash private investment and create jobs 
by providing a one-time injection of seed capital to incentivize private companies to invest in 
deploying wireless networks in communities that would otherwise be bypassed.
Finally, the Mobility Fund proposal is a model for how we can achieve broader USF 
reform: efficiently targeting support to spur private investment in 21st century networks where 
support is truly needed, while putting USF on a fiscally responsible and sustainable path.
I thank the staff for their hard work on this item.