The Federal Communication Commission says a retooling of a federal fund used to subsidized telephone service will help expand rural broadband Internet access.
But a South Dakota official says the new $4.5 billion Connect America Fund is actually hindering expansion in the state.
Public Utilities Commission Chairman Chris Nelson says companies are backing off from future fiber optic projects because of uncertainty in the commission's funding formula.
The FCC in November adopted reforms aimed at bringing the Universal Service Fund into the digital age. FCC Chairman Julius Genachowski says the old fund had become inefficient and wasteful, and it was leaving very large parts of rural American behind.
Genachowski says 44 percent of South Dakota's rural population lacks high speed Internet, and the new fund will help expand access.
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