Universal Service Contribution Factor Challenged on Constitutional Grounds

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A group calling itself Consumers’ Research, Cause Based Commerce, Inc. has filed comments with the FCC asking that its proposed fourth quarter USF contribution factor be rejected, and that any and all additional USF revenue not be collected and put in the fund.

Their filing pointed to a number of ways in which the fund is unconstitutional, in violation of statutory authority, and illegal for a variety of reasons. What is given virtually no recognition is the Congressional mandate and legal requirement that every franchised local telephone company is required by the Telecommunications Act to provide Universal Service at affordable rates.

And therein lies the rub. The very smallest, local phone companies are required to provide service to everyone in their franchised exchanges, while large national and international corporations are free to pick their customers in any markets of their choice.

This situation in all probability will not change until there are new rules, or advanced technologies, or other conditions that lie in the future. For now, entities like this Consumers Research group should be happy that rural, agrarian, remote and poorer areas of America have reliable services at affordable rates, in large part due to small, independent telephone companies.

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