Replacement of the Legacy High-Cost Universal Support Fund with a Connect America Fund: Key Economic and Legal Considerations

Wed Dec 01 11:48:29 EST 2010
Christian Dippon with Christopher Huther and Megan Troy of Sheppard Mullin Richter & Hampton LLP

On 21 April 2010, the Federal Communications Commission (FCC) released a Notice of Inquiry (NOI) and a Notice of Proposed Rulemaking (NPRM) that seek the public's input on the FCC's effort to replace the legacy high-cost universal service fund (USF) with a broadband "Connect America" fund (CAF). In effect, the FCC seeks to implement cost-cutting measures for existing voice support and create a new fund to support the provision of broadband communications in areas that would be unserved without such support or that depend on universal service support for the maintenance of existing broadband service.

In this article from Communications & Strategies, NERA Vice President Christian Dippon and Christopher Huther and Megan Troy of Sheppard Mullin Richter & Hampton LLP discuss the key economic and legal considerations of the FCC's recent NOI/NRPM designed to encourage investment in, and the deployment of, broadband infrastructure in areas in which it is lacking. As the note highlights, the path that the FCC will take on sizing the CAF and reforming the USF will have a fundamental impact on existing subsidy regimes and on the competitive landscape in the US communications industry.