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Appeals court upholds FCC rules requiring VoIP contribution to phone service fund

[JURIST] The US Court of Appeals for the District of Columbia [official website] Friday ruled against [decision, PDF] Internet telephone (VoIP - Voice over Internet Protocol) provider Vonage [corporate website] in its challenge to 2006 FCC rules [PDF text; press release, PDF] requiring VoIP providers to contribute to the Universal Service Fund (USF) [official backgrounder]. Vonage raised rates [press release] in response to the new rules, but challenged the FCC regarding how much the company had to contribute to the fund. Although the decision strikes down part of the new rules, it affirms the statutory authority of the FCC to require USF contributions from VoIP providers.

The USF, administered by the Universal Service Administrative Company [official website], subsidizes phone service and communications costs to ensure that consumers and health care providers in rural areas pay rates comparable to those charged to urban counterparts for similar services. The fund also subsidizes basic local phone service for low income consumers, as well as supporting communication and Internet services for schools and libraries. Reuters has more.

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