FCC Boosts Rural Broadband Spending by $500M

Item also tees up providing 'predictable' support
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The FCC has provided an extra $500 million in Universal Service Fund subsidies for rural broadband deployment.

That came in an order an notice of proposed rulemaking released Friday (March 23).

Closing the rural digital divide is an avowed priority for both the FCC under chair Ajit Pai and President Trump.

Pai said the item also "tees up an examination of how to ensure that we provide sufficient and predictable support over the long term so that communities served by small carriers aren’t stuck on the wrong side of the digital divide."

"Building on earlier efforts to modernize high-cost universal service support, we seek to offer greater certainty and predictability to rate-of-return carriers and create incentives to bring broadband to the areas that need it most," said Pai.

Commissioner Jessica Rosenworcel supported the item, but dissented in part because she said it "fails to ask any questions about how to protect rural consumers who lack other service options if they find they are on the losing end of discriminatory network practices in the wake of the FCC’s net neutrality repeal.  This is wrong.  It deserves discussion and our failure to do so is an unfortunate abdication of our most basic consumer protection duties."

Commissioner Mignon Clyburn dissented, saying she made a bunch of suggestions that the chairman dismissed. She also took issue with the chairman's characterization of those suggestions as last-minute.

"We had an incredible opportunity to not only “walk the walk, but talk the talk.” Unfortunately, this item stumbles on many levels," she said. "[T]o suggest that my requests were last-minute, as the Chairman does in his statement, disingenuously characterizes the fact that I had communicated my requests to his office weeks before the voting deadline. Rather than exercise his power to extend the voting deadline, he made it clear that he simply did not want to deal, and for that I am disappointed," she said.

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Pai had said that his colleagues "had 58 days to review the item but waited until after the close of business on the 57th day—the day before the 'must vote' deadline, which itself had already been extended—to propose substantive edits."

The item was voted on circulation, which means the chairman circulates it for a vote outside the public meeting and the other commissioners are on the clock to vote it.

The item comprises three parts.

 1. There is a Report and Order providing that additional money for rural broadband in exchange for increased broadband deployment obligations and codifying rules that protect the high-cost universal service support fund from waste, fraud, and abuse and "explicitly prohibiting the use of federal high-cost support for expenses that are not used for the provision, maintenance, and upgrading of facilities and services for which the high-cost support is intended."

 2. There is a Third Order on Reconsideration resolving issues raised in petitions to reconsider the FCC's rate-of-return reforms

 3.There is a Notice of Proposed Rulemaking teeing up further reforms, including a budget "that will allow for robust broadband deployment in rate-of-return areas while minimizing the burden that contributions to the Universal Service Fund (the Fund) place on ratepayers and to bring greater certainty and stability to rate-of-return high-cost funding, both in the near term and in the future."

 “We are still reviewing the details of the order and related items released by the FCC today, but as a threshold matter, we welcome several aspects of today’s action," said Shirley Bloomfield, CEO of NTCA-The Rural Broadband Association.

 “First, NTCA has actively engaged in the effort to secure greater, bright-line clarity in determining what is and is not recoverable through universal service. NTCA has seen this as important to promote effective and efficient use of limited resources for the benefit of both consumers and stakeholders in that system. While we’re still working through the specifics of the FCC’s revisions, we welcome generally efforts to provide clearer guidance on such issues going forward."

“More importantly, however, today’s action by the FCC to address immediate USF budget crises represents a much-needed ‘shot in the arm’ for rural broadband and charts a course toward realizing the goal of promoting and sustaining effective broadband deployment in rural America."

“This is another significant and meaningful step toward closing the rural broadband gap and moving us farther down the road to ensuring consumers living in rural America have the high-speed broadband they need to fully participate in our digital economy," said USTelecom CEO Jonathan Spalter. "By increasing funding and putting in place tighter controls on expenditures, the Commission is reinforcing its number one priority – closing the digital divide.”

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