FCC set to limit Universal Service Fund for rural phone subsidies

The Federal Communications Commission was poised on Monday to impose a cap on fast-growing subsidies the government allots to providers of telephone service in rural America. A proposal to limit the phone subsidies moved towards passage as FCC Commissioner Robert McDowell threw his support behind the idea, giving it a crucial third vote on the five- member commission. "Like an unabated fever, expenditures from this fund continue to spike out of control," Commissioner McDowell said. The measure to be adopted by the FCC would cap the fund at March 2008 levels, or about $1.3 billion to $1.4 billion a year according to recent estimates. Commissioner McDowell said he also supports a provision that would exempt phone carriers that serve tribal lands and Alaska native lands. The rural phone subsidies are the largest component in a larger, "universal service" fund administered by the FCC, which is paid for through a surcharge on long distance phone calls that is billed to carriers and typically passed on to their subscribers. In addition to rural service, the fund subsidizes phone service to low-income households, as well as communications services and Internet access for schools, hospitals and libraries.
http://uk.reuters.com/article/technology-media-telco-SP/idUKN28506067200...

FCC May Cap Phone Subsidy Fund
http://online.wsj.com/article/SB120942886620851295.html?mod=todays_us_pa...