Court Says Vonage Needs To Throw Away Money Into Wasteful USF Program

from the that'll-help-just-about-no-one dept

The Universal Service Fund (USF) is a well-known joke. It's a hugely wasteful program with almost no oversight. Yet, last year, the FCC decided that VoIP companies needed to pay a huge chunk of their revenue to the USF, despite the fact that doing so would actually slow progress on getting universal service. That's because the money would go from these new, cheaper services into the bank accounts of the big incumbents who would then promise to provide universal service... without much actually happening. Vonage stood up to this decision and sued, claiming the FCC had no say in the matter, but a court has ruled against Vonage, saying that the FCC didn't overstep its bounds. With Verizon breathing down Vonage's neck over patents, the real irony may be that Vonage will now have to hand over money into the USF, that will go right over to Verizon and not into extending service to underserved areas.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Jonathan, Jun 4th, 2007 @ 8:42pm

    duh

    yet another reason why congressional oversight needs to stop overlooking at&t mergers galore. telecoms are becoming increasingly manipulative in the capitol and dangerous to the growth of the telecom sector. now they seem to have a hold on the judiciary. telecom is the fourth branch of government you never learned about in ps101.

     

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  2.  
    identicon
    Kyros, Jun 4th, 2007 @ 9:00pm

    ^ Sad but true.

     

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  3.  
    identicon
    James Stevens, Jun 4th, 2007 @ 11:49pm

    why?

    Sad... just sad and wrong.

     

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  4.  
    identicon
    Anonymous Coward, Jun 5th, 2007 @ 12:05am

    Friends in High Places

    It certainly helps to have friends in high places. Just ask the big incumbent telcos.

     

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  5.  
    identicon
    Anonymous Coward, Jun 5th, 2007 @ 12:29am

    As much as I hate to say it, if I was a tech company these days I'd concentrate most of my efforts overseas, mainly in India and China. India, for example, has about 400 million people under the age of 18. Which means in the next few decades a market will evolve that is about 30% larger than the entire population of the US.

    Given the growth rates of infrastructure in these countries as opposed to the US, and the level of stagnation being increasingly imposed on this country by large incumbents like AT&T and the RIAA/MPAA (not to mention other factors like the amount of US debt being financed by countries like China) it seems quite likely that within another decade the potential for financial gain could be much greater overseas then here in the US.

    If the growth rates of the industry and technology in these countries, particularly India, can be synched with the population growth I'd say within about 20-25 years the US will no longer be the world leader (in just about anything) anymore.

     

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  6.  
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    Paul, Jun 5th, 2007 @ 1:57am

    There are of course some major cons to a monopolistic telecommunications industry, but it's quite necessary. For instance, if the baby Bells were still split up, there would be no incentive for each independent company to lay down new and improved infrastructures. By combining all the old Bells, it is now fiscally possible for att to renovate and create newer and faster telecommunication backbones. Can you say fiber to the doorstep? Yes, please.

     

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  7.  
    identicon
    Anonymous Coward, Jun 5th, 2007 @ 4:06am

    Re:

    Do you actually believe those dinosaurs are actually going to do that? Wouldn't they have done it already if they had any intention of doing it? Big Telco is ALL about taking these fees and doing ABSOLUTELY NOTHING (except lining their own pockets).

     

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  8.  
    identicon
    Vincent Clement, Jun 5th, 2007 @ 5:39am

    Ah, good old government regulation. And people want the government to legislate net neutrality?

     

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  9.  
    identicon
    SP, Jun 5th, 2007 @ 6:03am

    Exactly Right...

    Do you actually believe those dinosaurs are actually going to do that? Wouldn't they have done it already if they had any intention of doing it? Big Telco is ALL about taking these fees and doing ABSOLUTELY NOTHING (except lining their own pockets).

    I couldn't agree more. It's just like BIG OIL. Alternative fuel technology is among us but is BIG OIL going to do anything abotu it? Nope. They're going to keep doing what they've done for years...suck as much $$$ from us and laugh all the way to the bank. BIG OIL, BIG TELCO...two hidden "branches" of our Govt if you ask me.

     

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  10.  
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    Jim Durbin, Jun 5th, 2007 @ 7:28am

    Big Oil Has Nothing on...

    It's not Big Oil and Big Telco you have to worry about - it's Big Hair. How do those lobbyists always manage to pass laws that require cosmetologists to acquire a license to cut hair?

     

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  11.  
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    viperlmw, Jun 5th, 2007 @ 8:17am

    It's not the Baby Bells who get USF money...

    It's the independent ILECs who get USF money. It's companies like Frontier, Windstream, Embarq and the small ILECs who get virtually all of the USF money. And RBOC prices are usually cheaper.

     

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  12.  
    identicon
    Anonymous Cow-herd, Jun 5th, 2007 @ 12:39pm

    Re:

    You're implying that the monopolistic telecom industry lays down new and improved infrastructures?!?

     

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  13.  
    identicon
    Paul, Jun 5th, 2007 @ 4:07pm

    I'm implying nothing. It's happening.

     

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  14.  
    identicon
    Mr. Tea, Jun 5th, 2007 @ 6:23pm

    Big Hair?!?

    No, my friend, it's not big hair.
    It's big BOOBS. You may want to pretend they're not there, but you just can't ignore them! If I have to choose between Big Oil, Big Telco,Big Hair or Big Boobs, I'll grab the boobs every time.

     

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  15.  
    identicon
    nurse, Dec 1st, 2008 @ 4:39am

    Re: Big Hair?!?

    It's the independent ILECs who get USF money. It's companies like Frontier, Windstream, Embarq and the small ILECs who get virtually all of the USF money. And RBOC prices are usually cheaper laptop batteries.

     

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  16.  
    identicon
    Bazza, May 5th, 2009 @ 5:19am

    Re

    @Anonymous Cow-herd

    In fact in almost all countries the only bodies that have *ever* laid down large infrastructure are either government owned, or large monopolies.

    Free enterprise and competition are usually what follows, skimming the cream and conning the public into thinking things are only going to get better. Eventually the Emperor's New Clothes are seen for what they are, but not normally before irreversible rot has set in.

     

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