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Wednesday, July 02, 2008

High-cost cap

It's finally official: the FCC has put a cap on the the High Cost Fund of the USF. I blogged about it when the cap was first recommended by the Federal-State Joint Board on Universal Service back in November. Basically, the FCC has imposed an emergency interim cap on the High Cost Program (which was ballooning out of control). The cap is state-by-state, and is whatever funding was going to that state in March 2008.

Anyone want to start a pool on how long this "interim" cap will last? Just guess the millenium when you think it will expire.

How does it affect the E-Rate? I'm no political expert, but it seems to me that if the cost of the High Cost Program had kept surging, it would have kept pulling Congress' attention back to the USF, with an eye to reducing the cost. So I suppose there was a chance the FCC would have been forced to rob Peter (the E-Rate) to pay Paul (the High Cost Fund).

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