Chairman Pai's Response to Members of Congress Regarding Affordable Broadband in High-Cost Rural Areas
On June 16, 2017, Federal Communications Commission Chairman Ajit Pai responded to various members of Congress responding to questions surrounding affordable broadband in high-cost rural areas.
Chairman Pai wrote, "Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order, I still hear from small carriers that offering stand-alone broadband would put them underwater-that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues."