O'Rielly Suggests Increasing Rural Telco USF Support by Tapping High-Cost Reserve Fund

short-term," he said at an WTA conference in Coeur d'Alene, Idaho. "While it may not provide all the relief sought by affected carriers, it could benefit consumers and carriers in areas more difficult to serve." O'Rielly said the FCC's $4.5 billion high-cost budget, about $2 billion of which goes to rate-of-return carriers, is due for review under a 2011 overhaul order. "If the Commission does nothing, I’m told that the budget expires, any reserves that have not been committed are used to reduce the contribution factor, and funding for the program would be based solely on demand in any given quarter," he said. "That is not an acceptable outcome." He noted he backed firm USF budgets or caps, including on Lifeline: "We cannot, at the same time, allow the high-cost program to operate without its own budget control." He said the FCC may need to consider a temporary extension of the current budget and reserve policy. He noted the agency is considering revising its access recovery charge imputation rule, and he hopes it "resolves this and other pending issues soon, including specifying in more detail which expenses are not recoverable" under regulatory mechanisms. He couldn't support expanding the USF contribution base to broadband users, absent congressional direction. He wouldn't be surprised to see a net neutrality decision "later this year" and hoped broadband infrastructure deployment proceedings would "bear fruit" in coming months.