The National Telecommunications Cooperative Association (NTCA) is challenging the FCC's efforts to overhaul its Universal Service Fund (USF) and intercarrier compensation systems.
The group filed a petition for review on Friday with the U.S. Court of Appeals for the Fourth Circuit.
The suit calls portions of the order "arbitrary, capricious, an abuse of discretion, contrary to statute and to the Fifth Amendment of the United States Constitution, in excess of or contrary to statutory authority, a departure from reasoned decision-making, and otherwise unlawful."
NTCA says the new regulations will make it difficult for rural telecommunications companies to operate in remote areas of the country, where low population density makes it difficult to make a profit.
"Provisions mandating an ultimate price of zero for all switched access and reciprocal compensation services, imposing retroactive and dynamically changing caps on USF-supported costs and blurring the lines between regulated and non-regulated operations, are inconsistent with law," NTCA policy chief Michael Romano said. "These provisions will harm rural communities, and will not help to advance the availability and affordability of services for all rural consumers."
An FCC spokesman said the agency would "vigorously" defend itself in court.
“These reforms took an outdated, broken system designed for the telephone era and modernized it for broadband, our 21st century essential infrastructure," the spokesman said. "In doing so, the Commission increased certainty – including with respect to intercarrier compensation – and eliminated waste, enabling the private sector to invest in expanding broadband to all Americans by the end of the decade."
The FCC unveiled its plan to fix the USF fund and intercarrier compensation system in October. The proposal was met by a tepid response from many in the wireless industry who criticized its lack of funding for mobile broadband and rural operators.