Court Says Vonage Needs To Throw Away Money Into Wasteful USF Program

from the that'll-help-just-about-no-one dept

Mon, Jun 4th 2007 8:35pm — Mike Masnick

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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16 Comments

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Jonathan, 4 Jun 2007 @ 8:42pm

duh
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.
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Kyros, 4 Jun 2007 @ 9:00pm

^ Sad but true.
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James Stevens, 4 Jun 2007 @ 11:49pm

why?
Sad... just sad and wrong.
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Anonymous Coward, 5 Jun 2007 @ 12:05am

Friends in High Places
It certainly helps to have friends in high places. Just ask the big incumbent telcos.
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Anonymous Coward, 5 Jun 2007 @ 12:29am

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.
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Paul, 5 Jun 2007 @ 1:57am

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.
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- Anonymous Coward, 5 Jun 2007 @ 4:06am
  
  Re:
  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).
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- Anonymous Cow-herd, 5 Jun 2007 @ 12:39pm
  
  Re:
  You're implying that the monopolistic telecom industry lays down new and improved infrastructures?!?
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Vincent Clement, 5 Jun 2007 @ 5:39am

Ah, good old government regulation. And people want the government to legislate net neutrality?
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SP, 5 Jun 2007 @ 6:03am

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.
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Jim Durbin, 5 Jun 2007 @ 7:28am

Big Oil Has Nothing on...
It's not Big Oil and Big Telco you have to worry about - it's Big Hair. How do those lobbyists always manage to pass laws that require cosmetologists to acquire a license to cut hair?
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viperlmw, 5 Jun 2007 @ 8:17am

It's not the Baby Bells who get USF money...
It's the independent ILECs who get USF money. It's companies like Frontier, Windstream, Embarq and the small ILECs who get virtually all of the USF money. And RBOC prices are usually cheaper.
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Paul, 5 Jun 2007 @ 4:07pm

I'm implying nothing. It's happening.
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Mr. Tea, 5 Jun 2007 @ 6:23pm

Big Hair?!?
No, my friend, it's not big hair.
It's big BOOBS. You may want to pretend they're not there, but you just can't ignore them! If I have to choose between Big Oil, Big Telco,Big Hair or Big Boobs, I'll grab the boobs every time.
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- nurse, 1 Dec 2008 @ 4:39am
  
  Re: Big Hair?!?
  It's the independent ILECs who get USF money. It's companies like Frontier, Windstream, Embarq and the small ILECs who get virtually all of the USF money. And RBOC prices are usually cheaper laptop batteries.
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Bazza, 5 May 2009 @ 5:19am

Re
@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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