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Georgia House committee passes bill eliminating universal service fund

Posted February 17th, 2012 in Georgia, telephone, universal service fund and tagged , by Alton Drew

It looks like the state of Georgia doesn’t need universal funding for telephone service anymore. The Georgia House Committee on Energy, Utilities, and Telecommunications passed HB 855, the Telecommunications Fair Competition and Consumer Protection Act. The Act would reduce the amount of universal service funding received to the equivalent of 110% of the average state-wide weighted rate of a residential line provided by rate of return carrier.

The bill also caps payments received from the fund for the next three years. In 2012, distributions would be capped at $9 million; in 2013 at $6 million; and in 2014 at $3 million. There would be no more distributions after 2014.

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FCC reiterates prohibition on phone call interference

The Federal Communications Commission today released a Declaratory Ruling reminding carriers of the long standing prohibition on actions that block, choke, reduce, or otherwise restrict telephone traffic. Should these practices lead to call termination or other call quality issues, the FCC may find the practices in violation of sections 201 and 202 of the Communications Act.

The declaratory ruling is a result of claims made by rural telephone consumers and local exchange companies that long distance phone companies were violating statute by engaging in traffic restrictive actions. At the root of these problems may be what the Declaratory Ruling refers to as third-party routing providers. Allegedly, long distance carriers are using these routing providers for the purpose of reducing or eliminating termination charges.

The FCC believes consumers risk being harmed by these practices. Poor quality of calls; delays in call setups; long ringing; or not receiving calls at all appear to be some of the problems rural consumers are facing, according to the FCC.

Begs the question, is the current market structure, where third-party providers are handing off calls to rate-of-return local exchange companies, benefiting consumer welfare? I also wonder if this Declaratory Ruling would stand in court.