updated 01:48 pm EDT, Sun May 25, 2014
Carriers appealed plan over moving telephone subsidies to internet, subsidy concerns
The Federal Communications Commission (FCC) saw its 2011 proposal to expand broadband to rural areas upheld after a judge rejected arguments from carriers over the loss of telephone subsidy funds. The Connect America Fund, a $4.5 million initiative aimed at spreading faster Internet access to seven million people who live in rural areas, was under review by the United States Court of Appeals for the 10th Circuit in Denver after numerous telecommunication companies challenged the plan.
The 297-page filing outlines many of the claims from providers, often worried about the financial impact that would be caused by the FCC shifting annual telephone subsides to broadband. Concerns were brought up about the change in the intercarrier compensations system, which might have a larger effect on smaller telecom companies due to the exchanging of funds between carriers to transfer calls between one another. These sorts of transfers are more common in rural areas and require more payouts, since many of the calls requiring a move start from these smaller carriers.
The court rejected the claims made by the carriers, stating that after "considering those claims, we find them either unpersuasive or barred from judicial review." FCC Commissioner Mignon Clyburn issued a statement after the decision, commenting on how pleased she was with the decision.
"After years of good faith efforts faltered, voting to approve the comprehensive reform of universal service and intercarrier compensation continues to be one of my proudest moments at the FCC," said Clyburn. "The reforms are changing the lives of millions of Americans who will receive broadband for the first time. I am extremely pleased that the 10th Circuit Court of Appeals has affirmed the FCC's decision. I look forward to working with the Chairman and my colleagues as we tackle the next steps of reform."
The plan, which would be funded by a fee on customer bills, would see funding used to increase broadband availability to a portion of the 14 million people in the country without high-speed Internet in rural areas. Connect America is a part of the Universal Service Fund that has been under fire in past because of fraud connections to pieces including the lifeline program.
While many of the carriers involved in the appeal are smaller, area-specific carriers, some bigger companies, such as AT&T, Centurylink, US Cellular and Pacific Docomo, are named as petitioners in the appeal.