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.
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