Staci Pies is director of Government and Regulatory Affairs for Skype, where she works at the state and federal level to drive public policies that protect consumer access to innovative technologies.

Josh Silverman spent the day at the annual State of the Net Conference in Washington DC, where the hot topic of discussion was the state of the global economy, and the impending passage of President-elect Obama’s economic stimulus package.

This stimulus package currently includes proposals to bring broadband Internet service to the entire country. The FCC can play an important role in doing this by reforming the Federal Universal Service Fund, to support broadband connections in rural and low-income areas. This will benefit the entire country by creating significant economic and democratic opportunities for all US residents.

Today, anyone who is making or receiving landline phone calls using a phone network pays a portion of their phone bill into a fund that is used to subsidize the phone network in high cost and rural areas of the country.

At the moment, this fund subsidizes only narrowband networks, which are of limited value. Skype, as well as many other organizations which understand the value of broadband connections, believe that the Universal Service Fund should be used to provide everyone in the US with access to affordable, open and neutral broadband connections.

This will allow people across the US to take advantage of life-changing broadband services and applications, Skype included, of course.

At Skype, we believe that people should have the ability to use Skype over any broadband connection and on any broadband-enabled device. Given that the Universal Service Fund is funded by US taxpayers, Skype believes that service providers that receive money should be subject to two conditions:

1. Access to web sites, services and applications should be open and neutral. As well as offering US residents the freedom to make the most of their broadband connections, this will also offer the stability required by application developers.
2. Rigorous performance measures should be enforced. Government policies should challenge network operators to deliver both download and upload speeds in the area of 75-50 megabits per second. Setting the target lower than this merely mirrors what providers are already doing.

These policies will jump-start a virtuous cycle in which robust and affordable broadband Internet access stimulates innovation, job creation. Ultimately, it will allow people to create applications that will improve economic conditions and create opportunities for rural and low-income US residents online, and we think Skype is a perfect example. Skype enables people, especially those in these groups, to connect to friends, family, business colleagues and partners across the world.

For a great example of someone struggling with rural broadband access, look at Aliza Sherman’s post on WebWorkerDaily. Aliza moved from Anchorage to Tok, Alaska. She went from acceptable Internet speeds at a fairly reasonable price ($60-ish/month) to barely 512Kb/s upload and download, a 10 GB monthly limit and $180/month plus $30 per GB over the limit. She says:

“As a web worker, I’m still reeling from the adjustment and keeping a careful eye on my bandwidth usage daily.”

Her post explains in more detail how these connectivity challenges and unexpected expenses affected her web work.

Aliza using Skype to join a meeting from her new location in Tok. Photo: David McCreath.

Ponder the impact. Not only is Aliza paying more than three times as much as she was in Anchorage, but she is constantly trying to compensate for this challenge. How is the rural area of Tok expecting to attract new residents and businesses, or keep current residents, when access is inadequate and costs are so high? Thankfully, Aliza is still able to use Skype, but this is a clear indication that regulators need to establish minimum speed requirements. Her current connection is inadequate for all but the most basic web activity.

As this example illustrates, the benefits of universal access to broadband connections aren’t exclusive to Skype. It will allow people to reach beyond the traditionally limited employment opportunities in rural areas, which in turn should lead to greater job growth, economic productivity, and tax revenue – and improve the quality of life for millions of US residents.