According to the FCC, the Federal Appeals Court for the D.C.
Circuit Friday upheld the commission's decision last fall to plow Universal
Service funds reclaimed -- primarily from wireless carriers -- into the fertile
field of broadband via the newly created Connect America fund.
The Rural Cellular Association and the Universal Service for
America Coalition had challenged the FCC's order.
The FCC is migrating phone subsidies to broadband, a transition
it has recognized will be hard on some incumbents -- including smaller rural
carriers -- who relied on those funds.
"I am pleased that the court of appeals upheld the FCC's
ruling, an important victory for our universal service reforms," said FCC Chairman
Julius Genachowski. "The Commission's once-in-a-generation overhaul of the
universal service fund created the Connect America Fund to deliver broadband
access to unserved rural communities, which lack access to the benefits of
broadband, including jobs, opportunities for small businesses, better education
and quality healthcare. Funding previously relinquished by some carriers has
been used as a fiscally responsible down payment on those reforms. The Court's
opinion ensures that the FCC will continue to be able to use funds on hand to
rapidly implement the Connect America Fund and spur billions of dollars in
private investment, without increasing contributions paid by consumers and