The FCC defended its interim cap on high-cost universal service s...

commission said in a filing to the U.S. Court of Appeals for the District of Columbia Circuit. The Rural Cellular Association is leading a challenge to the 2007 order imposing the cap. The FCC said court decisions give it wide leeway in carrying out the Communications Act. “Under the Administrative Procedure Act, the Commission’s analysis must be upheld unless it is ‘arbitrary, capricious or an abuse of discretion,'” the agency said. “As it works on comprehensive universal service reform, which involves a broad and complex set of issues, the Commission reasonably imposed an interim cap on skyrocketing high-cost support disbursements to competitive ETCs in order to stabilize the program and limit the fees telecommunications customers pay to support it.” Support to incumbent carriers “has not grown in recent years” and “does not have the same potential for rapid explosive growth,” the FCC said, so it decided not to impose the same cap on them. Support for incumbents declined from 2005 to 2007, the commission said. Meanwhile, support for competitive ETCs increased from $17 million in 2001 to $1.18 billion in 2007, with average annual growth exceeding 100 percent, the FCC said. The commission noted that it imposed the cap after getting a May 2007 recommendation from the Federal-State Joint Board on Universal Service to take “immediate action to rein in the explosive growth in high- cost universal support disbursements.” - HB