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FCC Mall Room 
April2, 2014 
The Honorable Tom Wheeler 
Chairman 
Federal Communications Commission 
445 12th Street, SW 
Washington, D.C. 20554 
Dear Chairman Wheeler: 
On March 20, the FCC announced in a public notice that the "rate floor", which determines the 
rate small rural carriers charge to customers for voice services, could increase from $14.00 to 
$20.46 as early as this summer in the absence of further FCC action. As with any government 
price control, the unfortunate result will be consumer harm and market distortions completely 
contrary to the desired outcomes. 
You addressed the issue during a recent hearing of the House Financial Services and General 
Government Appropriations subcommittee by stating that the FCC may delay the initial date and 
phase-in the full rate increase. While your prompt response to a scenario that could immediately 
threaten local service in rural areas is appreciated, we are concerned about the negatives impacts 
of the rate floor on rural consumers more broadly than just this most recent and drastic rate 
increase. 
Echoing Commissioner Pai's recent testimony to the Senate Financial Services and General 
Government Appropriations subcommittee, the rate floor mechanism, in effect, offers certain 
rural telec9m companies money to raise customers' phone bills, with the price increases matched 
dollar-for-dollar from the federal universal service fund. This perverse incentive structure is 
· negatively impacting rural customers and is skewing the business costs of investing in the 
provision of rural service. 
For instance, under the FCC's Universal Service Transformation Order of2011 a company 
whose rural customers decline voice service, perhaps as a result of a sudden price spike, would 
be challenged by internal cost decisions when exploring the economics of deploying and 
servicing a broadband network to rural areas. This, in turn, would lead to either higher prices for 
consumers choosing only broadband service or a business' decision to leave the market 
altogether. Clearly, the effect of this policy is starkly at odds with the FCC's stated desire of 
encouraging the IP evolution. 
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Broadband is crucial to rural economic activity, healthcare, and public safety. At the same time, 
many rural Arkansans still heavily rely on local voice service. We must ensure that federal 
policies do not disproportionately impact the ability of businesses to offer either of those 
services. More importantly, we should not unfairly burden consumers who choose to live in 
rural parts of the country. 
I()~ G4t;-
Tom Cotton 
;z.:;.a;_,~ 
Rick Crawford M=OOofJ:_._ 
Steve omack 
Member of Congress 
Sincerely, 
~~~-Boozman 
~esSena~or 
~~~ 
Member of Congress