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FCC Rules that Prepaid Calling Cards are Subject to USF Fees


06/07/2006

The FCC has ruled that prepaid calling card vendors in the United States must pay into the USF (Universal Service Fund), a government program which helps to subsidize telephone service in remote and rural areas.

This decision means that AT&T Inc. will have to repay $553 million in access fees and USF payments that it had withheld on calling card services. The telephone giant had argued that its prepaid calling cards were information services, and were thus not subject to telecom-specific regulatory fees.

One exemption that the FCC has allowed for is cards sold through a contract with the Defense Department. This exception “should help ensure that our soldiers are able to obtain calling cards at reduced prices,” the commission said in its ruling.



 

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