Universal Service Fund

Rich Tehrani : Communications and Technology Blog - Tehrani.com
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Universal Service Fund

The USA Today have a great article about rural wireless carriers and the Universal Service Find.


The $3.5 billion fund, financed by a 10.7% fee on every long-distance bill, goes mostly to rural phone incumbents to keep basic home service affordable. That's because it's costly for companies to string wires to rural areas with few customers.

But to spur competition, the 1996 Telecommunications Act also lets the incumbents' rivals - most of which are wireless carriers - receive some of the money if state or federal officials find it's in the public interest. The sum received by wireless providers soared to about $230 million last year, from $2.6 million in 2000, the Federal Communications Commission (news - web sites) says.

Rural phone companies complain that those payments are unnecessary and a big reason the fund is under strain. The FCC (news - web sites) is listening. It's set to rule next month on a proposal that could sharply cut universal-service funding for wireless providers.

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