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AT&T Exec Sees Legal Problems in Congressional Raid on USF AT&T Exec Sees Legal Problems in Congressional Raid on USF

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Congress

AT&T Exec Sees Legal Problems in Congressional Raid on USF

July 19, 2011

An AT&T executive expressed concern Tuesday about the legal mess that could ensue
if Congress tries to tap into a major telecom fund to pay down the deficit.

His remarks expand criticisms of the proposal beyond the small rural carriers who have been sounding alarm all week to one of the largest and most influential companies in the telecom industry. House Majority Leader Eric Cantor, R-Va., has proposed diverting $1 billion of the $8 billion Universal Service Fund (USF) to help alleviate the deficit.

"There are definitely legal problems with that which are not well understood," Hank Hultquist, vice president for federal regulatory at AT&T, said during a panel hosted by information service Broadband Census.

Rural carriers who strongly rely on the subsidy fund, which pays for telecom services in rural and low-income households, are up in arms over Cantor's proposal.

Rural phone advocates say the proposal could prompt lawsuits from companies that lose funding, with some describing it as theft for the customers who pay into USF through a contribution line on the telephone bills.

Though little is known about how Cantor's USF proposal would be structured, telecom lawyers said they believe it would likely mirror a plan floated by House Budget Chairman Paul Ryan earlier this year.

Ryan's plan would cap contributions into the fund, containing its already enormous size, while attempting to recover $1 billion in waste, fraud, and abuse that would be diverted to deficit reduction.

It's not just phone companies that are wary of the proposal to raid USF. House Republicans see problems with the plan, as well.

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