FCC caps subsidy to rural cell phone providers Move benefits big telecom firms

May 2, 2008

Federal regulators agreed Thursday to temporarily cap a growing subsidy program that paid nearly $1.2 billion last year to cell phone companies that do business in rural areas.

The Federal Communications Commission voted 3-2 along party lines to limit payments to wireless carriers from the Universal Service Fund, which is supported by a tax on the phone bills of most Americans. The cap will remain in place until the commission passes a comprehensive reform package, which is in the works.

By JOHN DUNBAR AND DIBYA SARKAR THE ASSOCIATED PRESS

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