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.

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Comments on “Court Says Vonage Needs To Throw Away Money Into Wasteful USF Program”

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Jonathan says:


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.

Anonymous Coward says:

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.

Paul (user link) says:

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.

SP says:

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.

Bazza says:


@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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