Washington, D.C. – U.S. Senator Deb Fischer (R-Neb.), member of the Commerce, Science, and Transportation Committee, today joined 43 of her Senate colleagues in writing Federal Communications Commission (FCC) Chairman Thomas Wheeler calling for updates to rules governing the Universal Service Fund (USF) for broadband access expansion. Specifically, the senators urged the FCC to allow USF support for carriers serving rural consumers who seek broadband-only services.
Under current FCC rules, if a rural consumer buys voice services (with or without accompanying broadband services) from a small rural telephone company, the carrier is eligible for USF support. However, if the same rural consumer decides to buy broadband-only services, the carrier is no longer eligible to receive USF support for that subscriber.
The senators stress in their letter that current FCC policy discourages broadband adoption and hurts consumer choice and innovation. More and more households are opting to use wireless phones or voice-over Internet protocol services for their voice communication needs. Subsequently, subscriptions to broadband-only services have become increasingly popular nationwide.
This denial of universal service support for rural carriers in these situations disregards consumer preference and is at odds with the FCC’s own National Broadband Plan, which has the stated goal of promoting the deployment and adoption of broadband networks in rural America. The senators call on the FCC to propose rules addressing this concern as it moves forward with ongoing efforts to modernize the USF.
The senators write, “Consumers in areas served by smaller rural carriers should have the same fundamental choices among reasonably comparable services at reasonably comparable rates as consumers in other rural and urban areas.”
The letter was signed by a bipartisan group of 44 senators, including Senators John Thune (R-S.D.) and Amy Klobuchar (D-Minn.), who led the effort. A similar letter was led by Congressman Cory Gardner (R-Colorado-04) and signed by 89 members of the House of Representatives.
The Commerce, Science, and Transportation Committee has jurisdiction over the FCC and our nation’s technology and telecom policies.
The full text of the senators’ letter is included below and the signed letter is available HERE.
May 6, 2014
The Honorable Thomas Wheeler
Chairman
Federal Communications Commission
445 12th Street SW
Washington, DC 20554
Dear Chairman Wheeler:
We commend the Federal Communications Commission (FCC) for its ongoing efforts to modernize the Universal Service Fund (USF). As reforms move forward, the FCC must adhere to its statutory directive to provide mechanisms for universal service of advanced communications that are both sufficient and predictable. As part of these ongoing efforts, we call on the FCC to implement a mechanism for rural rate-of-return carriers allowing them to receive USF support for broadband-only subscribers in high-cost areas of the United States.
American households increasingly choose to meet their voice communication needs by abandoning their traditional landline “plain old telephone service” (POTS) options in favor of wireless and voice over Internet protocol services. These scenarios are increasingly common nationwide, in both urban and rural areas. Consumers today want the choice to fashion their own communications solutions to suit their needs, and that no longer necessarily includes POTS.
The rules governing USF support in rural areas have not kept up with this dynamic, consumer-driven market development. As you know, under current USF rules small rural carriers can receive high-cost support only for those consumers who subscribe to POTS. USF is supposed to increase broadband deployment, facilitate transition to new communications technologies, and bridge the digital divide, but the outdated paradigm may unintentionally have the opposite effect. The cycle created by the FCC’s current rules could, if not addressed in a timely manner, undermine consumer choice, deter broadband adoption, and inhibit technological evolution.
We recognize that USF reform requires difficult policy balancing. We support measures that ensure High Cost Program distributions are targeted appropriately and invested prudently. The fiscal integrity and accountability of USF provide the credibility necessary for the FCC to fulfill its statutory mandate to ensure rural communications services and prices are reasonably comparable to those in urban areas.
Given our shared commitment to rural consumers, we urge the FCC to propose rules, under authority granted by section 254 of the Communications Act, to carefully update existing USF mechanisms to provide sufficient and predictable support where consumers in areas served by smaller rural carriers affirmatively choose to adopt only broadband services even where POTS is also available to them. While it is important that the FCC complete its implementation of Phase II of the Connect America Fund in areas served by larger carriers this year, the FCC should nonetheless address smaller carrier support mechanisms expeditiously, accounting for their unique operations. Consumers in areas served by smaller rural carriers should have the same fundamental choices among reasonably comparable services at reasonably comparable rates as consumers in other rural and urban areas.
Sincerely,
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