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The Federal Communications Commission has ruled that issuers of prepaid calling cards must pay connection fees and help subsidize phone service in rural areas.

AT&T Inc. will have to repay the $553 million in access fees – charges paid to other carriers to connect calls – and Universal Service Fund payments that its predecessor, then known as AT&T Corp., had withheld on phone calling cards.

AT&T had argued that because its cards offered “enhancements” such as advertising, the cards were information services exempt from fees that apply to telecommunications services. The FCC ruled against AT&T, potentially leaving the company on the hook for the withheld payments.

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$553 million Prepaid Calling Card Fees to be Paid by AT&T

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