Chairman Pai's Response to Various Members of Congress Regarding Rural Broadband

On Nov 30, 2018, Federal Communications Commission Chairman Ajit Pai wrote to various Members of Congress regarding rural broadband. Many lawmakers expressed cocncernt hat budget limitations in the Universal Service FUnd's high cost program for legacy rate-of-return providers could result in undue reductionsin support for broadband deployment in rural communities. After noting that USF cuts were the legacy of the last Administration's 2016 Rate-of-Return Reform Order (in which Pai dissented), Chairman Pai wrote, "We started to address this problem in March, when the Commission dedicated an additional $500 million to support small, rural carriers deploying broadband to the farthest reaches of America. And I expect that we will finish our work in December. I have now circulated to my colleagues a proposed order that would reform our high-cost program for small carriers to increase its efficiency, its sufficiency, and its predictability, all while ensuring rural Americans get the high-quality services they need and deserve."

Chairman Pai then detailed the USF plan: "First, we’re promoting efficiency by offering rate-of-return carriers opportunity to opt in to model-based support, which would give them a guaranteed revenue stream for a decade in exchange for meeting specified buildout requirements. Second, we’re ensuring support is sufficient by offering additional funding to carriers that currently receive model-based support and who agree to meet increased buildout requirements. We’re also increasing funding for carriers who do not receive model-based support. Third, we’re making the program more predictable by setting a new long-term budget for rate-of-return carriers who choose not to opt in to model-based support and ending arbitrary funding cuts. And fourth, we’re increasing the target speeds for subsidized deployments from 10/1 Mbps to 25/3 Mbps. Long story short, we’re making the Universal Service Fund a more effective means of closing the digital divide."