This week the US Supreme Court ruled that the Universal Service Fund that raises $8 billion annually by putting a fee on all phone plans is legal.
The fund was created in early 1996 to help expand phone service to everyone in the United States. Recently it has been used to bring Internet to rural Americans.
The law has been challenged multiple times and it has once again been upheld as legal by the Supreme Court. With this ruling, the FCC can continue to collect fees from Americans and use the money to expand phone and Internet service.
The fight is likely not over as a second case is also pending in the Fifth Circuit Court of Appeals, and Bloomberg says in that case the courts may rule against the government.
Here is how the FCC describes the Universal Service Fund and who it helps.
- High Cost Support Mechanism provides support to certain qualifying telephone companies that serve high cost areas, thereby making phone service affordable for the residents of these regions.
- Low Income Support Mechanism assists low-income customers by helping to pay for monthly telephone charges as well as connection charges to initiate telephone service.
- Rural Health Care Support Mechanism allows rural health care providers to pay rates for telecommunications services similar to those of their urban counterparts, making telehealth services affordable.
- Schools and Libraries Support Mechanism, popularly known as the “E-Rate,” provides telecommunication services (e.g., local and long-distance calling, high-speed lines), Internet access, and internal connections (the equipment to deliver these services) to eligible schools and libraries.
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