For years we've discussed how the Universal Service Fund (USF) is perhaps one of the worst examples of government dysfunction and corporate abuse, even by the government's own admission. The fund, which customers have poured billions in fees into over the least decade -- is designed to help bring phone service (not broadband) to rural areas and broadband to the nation's libraries (which, well, hasn't gone so well).

Unfortunately, the FCC spent most of the last decade without adequately tracking where the money goes. As you can imagine, this meant that while much of the money went where it should, a significant chunk of it simply went back into company pockets or was magically lost on the municipal level. With the country exploring how to get broadband into the country's rural nooks and crannies, Uncle Sam's looking to expand the USF to fund broadband, according to Amy Shatz at the Wall Street Journal:Of course expanding the USF to cover rural broadband really wouldn't be "shaking up the status quo," but fixing the program so it actually works could be. Genachowski's statements continue to indicate that expanding the USF plays a major part in the FCC's new broadband plan, which they'll be unveiling to Congress in 77 days.

In 2008, UK telco British Telecom announced a widely lauded plan to invest in "fiber" (to the node), though the specifics weren't particularly impressive when you looked a little closer, and the "fiber to the press release" announcement was more about getting a regulatory back rub from the British Government and lots of taxpayer subsidies. Upon inspection, British Telecom's plan still left a lot of potential customers out of reach of broadband.

While Verizon gets most of the attention with their $23 billion investment in fiber to the home deployment, a significant chunk of the fiber to the home deployments in this country is being accomplished by roughly 700 smaller rural telcos, co-ops, and municipal operations. According to a new study by the National Telecommunications Cooperative Association (NTCA), a growing number of rural telcos are moving toward fiber to the node (like AT&T's U-Verse platform), while many others are moving directly to fiber to the home: story continues..

40% of the money consumers pay into the Universal Service Fund goes to fund the FCC's E-Rate program, which was designed to help deliver telecom services to unserved areas, and deliver broadband service to libraries. The program has doled out more than $25 billion since its inception in 1998, but as the government itself often acknowledges, the FCC has never really bothered to track how this money is spent.

Earlier this year we noted how companies like Verizon are very clearly turning away from rural America, creating a new niche for smaller "rural super telcos" to thrive. The merger of CenturyTel and Embarq creates one such company, but Windstream Communications is also picking up speed in this sector as well. Windstream recently acquired NuVox Communications, and was also rumored to be sniffing around the assets of bankrupt Fairpoint Communications. Windstream continues the trend today by announcing they're acquiring Iowa Telecom (and its 256,000 access lines, 95,000 broadband and 26,000 digital TV customers) for about $1.1 billion. Interestingly, the company has had money for acquisitions, but not for employees: the erosion of landline revenues recently resulted in a 3% workforce reduction.

While Comcast lobbyists tried their best to slow the encroachment of Verizon FiOS into their hometown of Philadelphia, the Philly city council authorized a citywide franchise back in February (you can read the agreement here (pdf) if you're into that kind of thing). As per the deal, Verizon has around seven years to wire the whole city, though these agreements (as with NYC and DC) often have loopholes that let Verizon extend deadlines or wiggle out of obligations should certain adoption numbers not be met. According to the Philadelphia Inquirer, service this week went live in Chestnut Hill, South Philadelphia and North Philadelphia, near Girard College. Additional neighborhoods should come online this year, but Verizon isn't saying which ones. Verizon does keep a PA construction notice (pdf) on their website, but it's quite often outdated.

The country of Finland recently declared they were making broadband a legal right, requiring that all 5.3 million of the country's residents be served by 1 Mbps service by next summer, and 100 Mbps service by 2015. That's a little easier to do in a country like Finland, which has just 5.3 million residents to our 300+ million, and doesn't have to deal with things like, well, Montana.

The FCC has long been an agency that has played fast and loose when it comes to using science and data to fuel its policy decisions. The agency for most of broadband's life cycle has been using outdated data, or inadequate data provided by industry lobbyists designed to make things look pretty and keep government out of their hair. With a new FCC and new boss Julius Genachowski, the agency has promised to be data driven. Yet Bruce Kushnick over at Harvard's Neiman Watchdog claims that in policy discussions, the agency's still using inadequate or old data -- sometimes more than a decade old -- to shape broadband and wireless policy.

Telecompetitor directs our attention to a study by ABI Research that indicates that femtocell shipments this year have been well, less than impressive. The technology, which creates essentially a micro-cell tower in the home, helps with coverage issues by allowing users to make calls over their home broadband connection.

According to a statement by the USDA's Rural Utilities Service (RUS) and the Commerce Department's National Telecommunications and Information Administration (NTIA), Uncle Sam will be consolidating the two remaining broadband stimulus funding rounds into one. According to the government, they're merging the funding rounds "to increase efficiency and better accommodate applicants." The government also issued a fifteen-day RFI requesting feedback from bidders aimed at improving the application process. So far, about 2,200 different companies and organizations have put in bids for the $7.2 billion in available funding, making two additional funding rounds a little silly for the volume of demand, versus the limited funding available.

Consumer Group Free Press takes a few shots at Verizon's inconsistent positions on rural broadband, noting that while the baby bell continually claims to support getting broadband into the nation's rural nooks and crannies, their actions of late say the complete opposite. Forget FiOS -- the new Verizon is uninterested in delivering even DSL or phone service to most rural markets, which is why they're continually selling off these markets in tricky tax loophole leaping deals that usually wind up badly for the consumer and the sold markets:Verizon's justification of course is that rural America is costly to wire.

Late on Friday, the National Telecommunications and Information Administration announced seven new state recipients of broadband mapping and improvement funds. As with the last round of funding, the awards were most notable for who wasn't among them: Connected Nation. Criticized by some as essentially a bell-funded lobbying vehicle dressed up as a broadband mapping organization, Connected Nation again missed out on broadband mapping funds in Alabama, Washington, Wyoming, Idaho, Maryland, Massachusetts, and Wisconsin. Those interested can track the funding by state via this map and grant database.

Back in January, bankrupt Charter Communications launched faster DOCSIS 60Mbps/5Mbps service, but only in St. Louis. Given Charter's bankruptcy (which they should be emerging from in a few weeks), it's not too surprising that the year was devoid of any additional launches -- until now. According to Charter, they're now launching the faster service in Victorville, California for $139.99 standalone, or $129.99 when bundled with an additional service. Not too surprisingly -- Charter sees competition from Verizon FiOS in Victorville, and is trying (albeit feebly with the cash on hand) to upgrade FiOS markets first.

As we explored last week in detail, Verizon appears to be pausing in their FiOS deployment in order to recoup some of the money in markets they've already deployed the service. One of the cities impacted by that pause is Boston, which is wondering where FiOS is given Verizon's struck citywide franchise deals with Philadelphia, New York, and Washington DC.

According to Australia's Computer World, the FCC's Susan Crawford has been meeting with Australia's phone industry lobbyists to closer examine that country's plan to build a national fiber network. Back in April, Australia announced plans to build a A$43 billion ($31 billion) network under the banner of a new private/public company -- with the government selling their stake after five years. Such a plan would obviously be considerably more expensive here in the States, and would face relentless opposition from the biggest carriers. Hopefully the FCC won't be following Australia's expensive and likely futile effort to clean the Internet of all its naughty bits. The FCC's broadband plan is scheduled to drop in 111 days.

Time Warner Cable launched faster $99 50/5 Mbps service in New York City late last month, though only in limited portions of the city. This limited footprint has proven to be a little confusing, as we've seen several customers complain that even Time Warner Cable isn't entirely sure which portions of the city have been upgraded yet.

The unions employees who warned regulators that Fairpoint wasn't equipped to handle the acquisition of Verizon's New England DSL and landline networks last year are rightfully saying "we told you so." As Fairpoint teeters toward possible bankruptcy, union officials tell Vermont locals that they can thank Verizon for all the fun everyone's having. Instead of simply selling to the highest bidder, Verizon used a Reverse Morris Trust to incur huge tax savings while dumping a huge debt load on Fairpoint.

The first round of NTIA grants doled out to states to map U.S. broadband were notable more for who wasn't chosen than who was.

Insiders tell the Boy Genius Report the company is gearing up for something called "Project Dark." What is it? According to the sources, it's a rapid expansion of the company's HSDPA network with speeds up to 21 Mbps (those speeds are already live in Philly), that's going to accompany the launch of the BlackBerry 9700 and a handful of Android-based devices. More interesting perhaps? T-Mobile's cooking up a new $50 unlimited voice, SMS/MMS and data for $50 a month aimed primarily at leeching customers from the growing number of no-contract operators. Of course unlimited never really means unlimited in T-Mobile parlance (they use a 10 GB cap), but if true, that would be a price that's hard to beat.

For years we've explored how many consumers are anywhere from a few miles to a few feet away from getting cable broadband service. Our forums are filled with tales from users who say getting their carrier to extend service that extra distance can be painfully expensive -- as in $25,000 for just a few hundred feet. The Cleveland Daily Banner (via Stop The Cap) explores how five relatively affluent development dwellers in Tennessee (including a former State Senator) are trying to get Charter to run coaxial cable an extra few miles to their development. Bankrupt Charter says the 36-48 months needed to see a return on the necessary $130,000 investment isn't a deal they'd do, but they are willing to run the cable if each person in the 55 home development is willing to pay $1,850.