Pai Seeks 'More Fundamental Reforms' of Legacy USF Support System for Rural Telcos
FCC Chairman Ajit Pai said "more fundamental reforms" are needed to shore up USF support for rural telcos, despite a 2016 overhaul designed to boost broadband. "I wish I could tell you that the FCC has fixed this problem," Pai…
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wrote in a recent letter responding to Rep. Mike Bost, R-Ill., and other lawmakers. "I repeatedly 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." Citing the complexity of funding controls, Pai said rural carriers under the legacy rate-of-return system lack certainty needed for long-term investment to improve connectivity. "I am committed to exploring how this situation can be changed and to determine the appropriate budget levels," he wrote. "The Commission should address the uncertainty caused by the current budget control mechanism -- such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning -- while being mindful of mitigating incentives to operate inefficiently."