FEDERAL COMMUNICATIONS COMMISSION
August 15.2012
~ULlU5 GENACHOWSKI
CHAIRMAN
The Honorable Cory Gardner
U.S. House of Rcprcscntatives
213 Cannon Ilouse Office Building
Washington. D.C. 20515
Dear Congressman Gardner:
Thank you for your letter rcgarding the Commission's process to reform the Universal
ervice Fund (USF) and intercarrier compensation (ICC) system. I want to assure you that the
Commission will continue to work with all stakeholders. including smaller rate-of-return
carriers. throughout thc reform process. Your letter will bc included in the record of the
proceeding and considered by thc Commission.
As you indicate, the Commission's unanimous overhaul of the Universal Service program
focused on three key goals: delivering broadband to the millions of unserved Americans,
requiring fiscal responsibility and accountability in USF spending to ensurc the long-term
sustainability of the Fund. and providing transition periods that rccognize business rcalities.
Thesc rcforms will put Amcrica on the path to universal broadband and advanced mobile
coverage critical stcps to create ncw jobs in rural Amcrica and across thc nation. In particular.
the creation of thc Connect America Fund (CAF) wi II accelerate broadband build-out to the 19
million Americans who currently have no access to robust broadband infrastructure. This will
create jobs and economic opportunity for small and large businesses in rural Amcrica. as wcll as
construction workers and salespeople. Increased broadband availability in rural areas will also
help schools and tcachers and providc telemedicinc opporlunities for doctors and health care
providers.
Thc Commission's implementation of the USFIICC Tran;/ormalion Order continues to
be guided by these principlcs, including making adjustments to thc Order as appropriatc. For
instance. on April 25. 2012, the Commission extcnded the transition for originating intercarrier
compensation payments. addressing a concern raiscd by a number of smaller carriers. Likcwisc.
in the Wirelinc Compctition Bureau's April Bellchmarks Order. the Bureau rcviscd the initiall)
proposed high-cost loop SUPP0rl benchmark catcgorics to respond to concerns raised by smaller
carriers. The rcviscd methodology accounts for sevcral additional drivers of cost in comparing
spending between carriers; it takcs recent invcstment into consideration: it extends thc transition
period to givc carriers more timc to adjust: and it provides a streamlincd process to address any
concerns about the accuracy of carriers' data. The Commission has also extended a number of
reporting deadlines for smaller carricrs.
445 12TH STREET S,W. WASHINGTON, D.C. 20554 • 202-418-1000
Page 2-The Honorable Cory Gardner
Even as we continue to make necessary adjustments. in order to extend broadband to
unserved rural communities while ensuring fiscal responsibility it is important to keep moving
forward with implementation of the Commission's reforms. As we do so, the Commission will
continue to run a fair. open process in which the valid concerns of stakeholders are add res ed­
working closely with affected carriers to ensure that residents of the nation's rural and high-cost
areas receive the qualit) voice and broadband services that all Americans need. I appreciate your
interest in this very important matter. Please let me know if I can be of any further assistance.
Sincerely.
----- .
.Julius Genachowski
FEDERAL COMMUNICATIONS COMMISSION
August 15. ~O I~
,JULIUS GENACHOWSKI
CHAIRMAN
The Iionorable Scott Tipton
.S. Housc of Representativcs
218 Cannon Ilouse Office Building
Washington, D.C. 20515
Dear Congressman Tipton:
Thank you for your letter regarding the Commission's proccss to reform the Universal
Service Fund (USF) and intercarricr compensation (ICC) system. I want to assure you that the
Commission will continue to work with all stakeholders. including smaller ratc-of-return
carricrs. throughout thc rcform process. Your Icttcr will be included in the rccord of the
proceeding and considered by thc Commission.
As you indicate, the Commission's unanimous overhaul ofthc Universal Service program
focused on threc kcy goals: delivering broadband to the millions of unscrvcd Americans.
rcquiring fiscal responsibility and accountability in USF spending to ensurc thc long-tcrm
sustainabilit) ofthc Fund, and providing transition periods that recognize busincss rcalities.
These reforms will put America on the path to univcrsal broadband and advanced mobile
covcragc - critical steps to crcate new job in rural Amcrica and across the nation. In particular.
the creation of the Connect America Fund (CAF) will accelerate broadband bui Id-out to the 19
million Americans who currently have no acce s to robust broadband infrastructure. This will
crcate jobs and economic opportunity for small and large busincsses in rural America, as wcll as
construction workers and salespeoplc. Incrcascd broadband availability in rural areas will also
help schools and teachers and providc tclcmedicine opportunities for doctors and health care
providers.
The Commission's implementation of the USFIICC Trans/orma/ion Order continues to
be guided by these principles. including making adjustments to the Order as appropriate. For
instance. on April 25. 1012. the Commission extended the transition for originating intercarrier
compcnsation payments. addrcssing a concern raised b) a numbcr of smaller carriers. Like\\ ise.
in the Wireline Competition Bureau's April Benchmarks Order. the Burcau rcviscd thc initiall)
proposed high-cost loop support bcnchmark categories to respond to concerns raised by smaller
carriers. The revised methodology accounts for several additional drivers of co t in comparing
spending bctwccn carriers; it takcs rcccnt invcstment into consideration; it cxtcnds thc transition
period to give carriers more timc to adjust: and it provides a streamlined process to address any
concerns about the accuracy of carriers' data. The Commission has also extcnded a number of
rcporting deadlines for smallcr carriers.
445 12TH STREET S. W. WASHINGTON, D.C. 20554 • 202~4 I 8-1000
Page 2-The Iionorable SCOtl Ti pton
Even as we continue to make necessary adjustments. in order to extend broadband to
unserved rural communities while ensuring fiscal responsibility it is important to keep moving
forward with implementation of the Commission's reforms. As we do so. the Commission will
continue to run a fair. open process in which the valid concerns of stakeholders are addressed­
working closely with affected carriers to cnsure that residents of the nation's rural and high-cost
areas receive the quality voice and broadband serviccs that all Americans need. J appreciate your
interest in this very important mailer. Pleasc let me know if I can be of any further assistance.
Sincerely.
------ .
Julius Genachowski