Appeals Court Must Stop Billions of Dollars of Illegal Costs Dumped on Local Telephone Customers

The Consumer Federation of America joined a lawsuit challenging the decision of the Federal Communication Commission to extend the allocation of costs between federal and state jurisdictions that was adopted in 2000 for another six years. The consumer pocketbook impact of the misallocation of costs is huge, totaling $150-$250 billion ($200-$300 per household per year) over the next six years. By misallocating costs and recovering them from the wrong people – not the cost causers – the allocation that the FCC seeks to freeze for and six years, wreaks havoc on consumer pocketbooks with hundreds of billions of dollars of misallocation and over-recovery of costs. The most effective first step in dealing with these problems is to cut them off at the source.  Without the misallocation and over recovery of costs, the goals of the Communications Act – universal service, just and reasonable rates, and increased competition – will be much easier. Convincing the court that the FCC allocation is illegal will force a more realistic, 21st century separation of costs between the intrastate and interstate jurisdictions.