Federal appeals court OK?s FCC rural telephone plan

When the FCC announced that it would use its $4.5 billion Connect America Fund to subsidize rural broadband, the commission was sued by dozens of telecoms, big and small. The Connect America Fund is designed to subsidize broadband build-out in high-cost rural areas that do not have any broadband provider. However, some rural companies fear the loss of rural telephone subsidies if the FCC’s Connect America diverts too much funding from voice to broadband.

But last week, the Tenth Federal Circuit Court in Denver upheld the FCC’s right to change its goals. As the court said:

“After carefully considering those[the telecom’s] claims, we find them either unpersuasive or barred from judicial review. Consequently, we deny the petitions to the extent they are based upon those claims.”

The court noted that the 1996 Telecommunication Act said that universal service is “evolving” and that the FCC must take “... into account advances in telecommunications and information technologies and services.”

The USF gets its funding from fees added to monthly long-distance telephone bills in order to make telephone service available to all. But today the national standard – and a necessity for full civic participation – includes not only voice but the full range of high-speed Internet.

As FCC Commissioner Mignon Clyburn said to The New York Times, the new focus away from voice is “changing the lives of millions of Americans who will receive broadband for the first time.”

FCC federal court decision (10th Circuit, May 23, 2014)

Court Approves F.C.C. Plan to Subsidize Rural Broadband Service (NY Times, May 23, 2014)