Wireless competitive eligible telecommunications carriers (CETCs) were dealt a blow last Friday by the D.C. Circuit Court of Appeals, which rejected an appeal of an FCC order that capped universal service fund (USF) high-cost payments to CETCs. The appeal, brought by the Rural Cellular Association (RCA) and other parties, concerns a May 2008 decision by the FCC that froze annual USF support payments for CETCs at March 2008 levels in accordance with the recommendations of the Federal-Joint Board on Universal Service. In so doing, the FCC cited a surge in USF high-cost payments from $1.5 million in 2000 to more than $1 billion in 2007—an increase attributable largely to the explosive growth of wireless CETCs. Incumbent local exchange carriers (ILECs) that include Verizon and AT&T and mid-size rural fixed-line carriers have voiced concerns that the proliferation of CETCs threatens to deplete the USF highcost fund. On appeal, RCA and the other petitioners argued that the FCC’s ruling (1) violated the agency’s principles on competitive neutrality, (2) was based on incorrect estimates of future CETC high-cost support provided to the Federal-State Joint Board, (3) violated statutory requirements that rural and urban phone rates be comparable, and (4) drew “unreasonable conclusions about the sustainability of the” USF high-cost fund. Rejecting the first argument, the three-judge panel concluded that CETCs “enjoy a significant advantage over ILECs under the current support system.” The court also decreed that the FCC “enjoys broad discretion” in balancing the sustainability of the fund against the need for universal service high-cost support, as it added that the petitioners “failed to demonstrate their high-cost support would actually be insufficient under the interim cap.”