FCC decides to cap universal service fund payments — MobileMonday Global: Industry News

^{A blow to smaller wireless carriers} FCC decides to cap universal service fund payments

FCC headquarters

4 May 2008 at 16:16 GMT Timo Poropudas

Federal Communications Commission voted to impose an interim cap on high-cost universal service fund payments to competitive eligible telecommunications carriers. This is seen as a blow to some smaller mobile-phone carriers that rely on subsidies to bring competitive services to underserved rural areas of the country.

The cap was one of the changes recommended by a federal-state joint board on universal service fund reform.

FCC Chairman Kevin Martin said action was needed, given the ballooning payments to mostly wireless carriers that have grown from USD 1.5 million in 2000 to more than one billion dollars in 2007. At the same time, rural wireline carriers receive three times as much as wireless operators from the high-cost universal service fund.

“A large and rapidly growing portion of the high-cost support program is now devoted to supporting multiple competitors to serve areas in which costs are prohibitively expensive for even one carrier,” Martin stated, RCR Wireless News reported.