FCC issues $100,000 NAL [telecom]

And, who are they actually fining?

Don't the ratepayers eventually pay this?

...Bob

You might as well ask the same question *any* time the government fines a business.

But if it's a LEC, aren't they regulated by the local PUC? They may not allow them to increase rates. And how much would they have to increase to recover $100K, anyway? Add a penny to each customer's bill, and they've made it back in a single billing cycle.

That is 100% true. It is always the consumer -- the bottom guy on the totem pole -- that eventually pays for everything.

In my state I think the PUC used to more or less guarantee that the stockholders would receive a certain return on their investment. But now, with regulated companies getting into unregulated activities, the whole thing gets murky. Costs and profits get shifted back and forth between the regulated and non-regulated portions of the operation. Still, it's the small guy that gets it in the end.

Nowadays, ILECs fall into two categories. Price Cap ILECs are allowed to make any profit level, but some (not all) their prices may be subject to certain limits. That category includes all of the Bells and other big carriers. They are not allowed to collect much per line from the Universal Service Fund; their high-cost areas are supposed to be cross-subsidized by their low-cost areas.

Rate of Return ILECs are still on a more traditional kind of regulation. These are almost all small rural carriers. But they don't ask state PUCs for rate increases as in the old days. They get their money from the federal Universal Service Fund. That takes their total allowable costs, subtracts their own revenues (often much less than half), and USF (paid from that ~16% tax on many services) makes up the rest.

If a carrier is fined, USF presumably does not consider it an allowable expense, so it comes out of their actual bottom line.

The carrier in Oklahoma, Hinton Tel, only has around 3000 lines. So it wouldn't be totally trivial on a per-line basis.