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FCC Wins Legal Tussle Over USF Allocation FCC Wins Legal Tussle Over USF Allocation

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FCC Wins Legal Tussle Over USF Allocation

July 13, 2012

A federal court on Friday upheld a Federal Communication Commission rule that redirects contributions collected under the High-Cost Universal Service Support Program, which subsidizes telecommunications access to residents of rural and geographically isolated regions of the U.S., for use to provide broadband services.

The Rural Cellular Association objected to a 2010 move by the FCC that allowed the reallocation of surrendered universal service support funds.This issue arose because Verizon Wireless, in its acquisition of Alltel, and Sprint Nextel, with its purchase of Clearwire, had agreed to waive universal service support as a merger condition.The RCA argued that any universal service funds that were waived should be put back into a general pool and distributed to eligible carriers.

The United States Court of Appeals for the District of Columbia rejected the RCA's arguments that the FCC's actions were outside its authority or unconstitutional.

FCC Chairman Julius Genachowski hailed the ruling, saying, "The Court's opinion ensures that the FCC will continue to be able to use funds on hand to rapidly implement the Connect America Fund and spur billions of dollars in private investment, without increasing contributions paid by consumers and businesses."

RCA President and CEO Steven K. Berry said in a statement, "Many of our members plan for and rely upon USF support, and it's unfortunate the FCC has left many carriers uncertain about their futures."

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