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FCC Launches 'Inquiry' Into Universal Service Fund

Agency seeks comments on managing and oversight of the USF, which is used primarily to subsidize rural telecom providers and low-income families.
The Federal Communications Commission said Wednesday [June 15] that it has opened a "broad inquiry" into the management and oversight of the Universal Service Fund, a small step toward USF reform, an idea that many telecom industry participants and observers have called for.

While the inquiry does not address USF's thorniest branch -- how and from whom it collects fees -- it is an opening gambit in the direction of overall USF reform, an industry and political battle that will likely pit rural-state senators and states against urban representatives and providers.

In a prepared statement, FCC chairman Kevin Martin said the inquiry "reaffirms the commission's commitment to improve the management, administration and oversight of the [fund]. It is incumbent upon us to take the steps necessary to improve the operational efficiency of the program while providing greater certainty to the recipients."

The USF also provides funds for Internet access at libraries and schools, a responsibility that got the FCC into hot political water last year when it cut off such funding in the middle of the presidential election season. In his statement Wednesday, Martin said the new inquiry seeks to streamline the E-rate program while also "ensuring that the programs' funds are used appropriately."

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