Federal Communications Law Journal

Document Type


Publication Date


Publication Citation

57 Federal Communications Law Journal 511 (2005)


In 1996, Congress passed the first substantial rework of the Communications Act of 1934. This Act was intended to benefit consumers by encouraging competition and establishing a series of explicit mechanisms for assuring universal service. One of the outcomes is the creation of significant controversy over the federal, and in some cases, state universal service subsidy for the class of telecommunications providers typically known as wireless or cellular and defined by federal statute as "commercial mobile radio service" ("CMRS"). Incumbent local exchange carriers ("ILECs") characterize these subsidies as a windfall and as unnecessary to provide wireless phone service. They argue that federal and state universal service funding is intended to subsidize high-cost local telephone service-not wireless service-which is substandard compared to landline service. CMRS providers assert that the federal Act was designed to create competition and that their services provide consumers alternatives as well as quality and convenient service with mobile advantages not offered by landlines. This Article will examine two recent FCC decisions and a Federal-State Joint Board on Universal Service Recommended Decision that are impacting the regulatory landscape. These decisions will affect the manner in which the FCC and state public utility commissioners deal with the eligible telecommunications carrier designation affecting the viability of companies, the scope of services to consumers, and the allocation of hundreds of millions of universal service dollars annually.