The Federal Communications Commission has introduced an interim cap on payments to competitive eligible telecommunications carrier (ETC) organizations under the Universal Service Fund (USF) established by Congress in 1996. The fund currently provides subsidizes for the development and operation of telecom services for rural Americans, schools, libraries and hospitals.

Consumers currently pay more than 11 percent in USF fees on their monthly landline, mobile-phone and World Wide Web bills. The FCC notes that USF payments to ETCs have ballooned from approximately $1.5 million in 2000 to more than $1 billion last year — to the benefit of wireless carriers, primarily.

The FCC’s decision is intended to stem the explosive growth of the fund while it pursues comprehensive reform of the program. whether left unchecked, the fund’s staggering growth would threaten the sustainability of the USF program and force consumers to pay excessive and ever-increasing contributions, FCC commissioner Robert McDowell said.

“Like an unabated fever, expenditures from that

fund continue to spike out of control,” McDowell said. “Ultimately, it is consumers who pay for these unbridled escalations.”

An Illusory Band-Aid

However, only three of the FCC’s five commissioners voted in favor of the funding cap. Though the majority believe the decision will enable the FCC to move forward on comprehensive reform of both the USF program and inter-carrier compensation, commissioner Michael Copps called the cap an “illusory band-aid.”

“It is supposed to contain costs but, in reality, imposes the much heavier cost of lost opportunity to reform universal service and put America back in the vanguard of advanced telecommunications,” Copps said.

The U.S. continues to lag in many worldly broadband rankings, Copps noted. And even as consumers and competitors around the world are receiving high-speed and high-value services, Americans in urban and rural areas and on tribal lands are falling further behind.

Moreover, the…

Orginal post by Top Tech News