WASHINGTON, D.C. — U.S. Senators John Thune (R-South Dakota), Ranking Member of the Senate Committee on Commerce, Science, and Transportation, and Amy Klobuchar (D-Minnesota) led 42 of their Senate colleagues in sending a letter to Federal Communications Commission (FCC) Chairman Thomas Wheeler calling on the FCC to implement a policy change that permits Universal Service Fund (USF) support for carriers that provide rural consumers with 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. But, if the same rural consumer decides to buy only broadband services, the carrier is no longer eligible to receive USF support for that subscriber. 

Unless addressed, this FCC policy will increasingly lead to an unintended outcome of less support and less choice for rural consumers, which is problematic since our country’s universal service policy is to increase broadband adoption and deployment in rural areas. This denial of universal service support disregards consumer preference and is at odds with the FCC’s own National Broadband Plan, which has a goal of promoting the deployment of and adoption of broadband networks in rural America.

Thune and Klobuchar were joined by Senators Kelly Ayotte (R-New Hampshire), Tammy Baldwin (D-Wisconsin), John Barrasso (R-Wyoming), Mark Begich (D-Alaska), Michael Bennet (D-Colorado), Roy Blunt (R- Missouri), Richard Burr (R-North Carolina), Saxby Chambliss (R-Georgia), Dan Coats (R-Indiana), Mike Crapo (R-Idaho), Dick Durbin (D-Illinois), Mike Enzi (R-Wyoming), Deb Fischer (R-Nebraska), Al Franken (D-Minnesota), Lindsey Graham (R-South Carolina), Chuck Grassley (R-Iowa), Tom Harkin (D-Iowa), Orrin Hatch (R-Utah), Heidi Heitkamp (D-North Dakota), Dean Heller (R-Nevada), John Hoeven (R-North Dakota), Jim Inhofe (R-Oklahoma), Johnny Isakson (R-Georgia), Ron Johnson (R-Wisconsin), Tim Johnson (D-South Dakota), Angus King (I-Maine), Claire McCaskill (D-Missouri), Mitch McConnell (R-Kentucky), Jeff Merkley (D-Oregon), Jerry Moran (R-Kansas), Lisa Murkowski (R-Alaska), Rob Portman (R-Ohio), Mark Pryor (D-Arkansas), Jim Risch (R-Idaho), Pat Roberts (R-Kansas), Tim Scott (R-South Carolina), Jean Shaheen (D-New Hampshire), Debbie Stabenow (D-Michigan), Jon Tester (D-Montana), Mark Udall (D-Colorado), John Walsh (D-Montana), and Ron Wyden (D-Oregon). 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 attached.

May 6, 2014

The Honorable Thomas Wheeler

Chairman

Federal Communications Commission

445 12^th 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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