The FCC has issued an NPRM that provides details regarding the implementation of Verizon Wireless’s and Sprint Nextel’s commitments to surrender high-cost universal service support as required by the FCC when it approved their respective mergers in 2008. The Order states that the surrendered support will not be redistributed to other CETCs as long as Verizon Wireless and Sprint Nextel retain their “eligibility,” and the Order directs USAC to hold the funds in reserve as a possible down payment on future broadband universal service reforms, the FCC’s Mobility Fund, and E-Rate programs.

The Order effectively denies CETC’s additional high-cost support that they expected would be available once Verizon Wireless and Sprint Nextel surrendered their support. It is likely that the Order will be challenged in court based on the FCC’s questionable authority to charge consumers for Verizon’s and Sprint’s high-cost support when such support will no longer be used for high-cost purposes.

Contact James Mardis for a background paper and please contact RTG’s Regulatory Counsel Ken Johnson or Tony Veach with any questions or comments.