FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFTICE OF THE CHAIRMAN The Honorable Mark Pryor Chairman October 24, 2014 Subcommittee on Communications, Technology, and the Internet Committee on Commerce, Science, and Transportation United States Senate 255 Dirksen Senate Office Building Washington, D.C. 20510 Dear Chairman Pryor: Thank you for your letter expressing concerns on the implementation of the urban rate floor. l appreciate your views and will ensure that your letter will be included in the record of the proceeding and considered as part of the Commission's review. As you note, the Commission Order adopted in April 2014 both delays until January 2015 the implementation ofthe 2014 rate floor, and then phases-in potential universal service support reductions associated with the rate floor. As a result, the universal service support reductions that go into effect in January of next year will be for only those lines with rates below $16, with no further increases until July 2016. Subsequent to July 2016, any potential reductions in universal service support will be phased in gradually through 2018. Moreover, the Commission's April Order exempts lines serving low-income households through the Lifeline program from any universal service support reductions associated with the rate floor. We took these steps to address concerns such as those you mentioned regarding "unnecessarily excessive" rate increases and possible difficulties some carriers may experience in making rate adjustments at the state level in a short period of time. Recipients of support are required to report semi-annually to the Commission the number oflines with rates below the rate floor, though, under the phase-in approach adopted by the Commission, no support reductions will occur for lines with rates below $16 until July 2016. This semi-annual report affords us an opportunity to collect and analyze hard data. I agree with you that we should use the information collected from carriers to evaluate how our implementation of this rule is affecting rural consumers and the achievement of our universal service goals, including, as you recognized, ensuring that neither rural nor urban consumers are subsidizing artificially low rates for a small number of consumers in some states. I will be particularly interested in how the data collected in January and July 2015 differs from the information we have collected in previous years. We have actually seen minimal impact on consumers since the Commission implemented this rule in 2012. The rate floor increased to $14 in 2013 from $10 in 2012, a 40 percent increase. However, consistent with our Page 2- The Honorable Mark Pryor rules, many carriers apparently did not raise their local rates, and continue to report lines with rates well below the $14 rate floor. Moreover, in 2014, carriers in 41 study areas in 16 states were still reporting a number of residential local service charges of $5 or less, further confirming that individual carriers may choose not to raise rates in response to the current rate floor. Please be assured that the Commission will take into consideration the concerns of all stakeholders as we endeavor to protect rural consumers from excessive rate hikes. I appreciate your interest in this matter. Please let me know ifl can be of any further assistance Sincerely, FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF T H E CHAIRMAN The I Ionorable Tammy Baldwin United States Senate 717 Hart Senate Office Building Washington, D.C. 20510 Dear Senator Baldwin: October 24, 2014 Thank you for your letter expressing concerns on the implementation of the urban rate floor. I appreciate your views and will ensure that your letter will be included in the record of the proceeding and considered as part of the Commission's review. As you note, the Commission Order adopted in April 2014 both delays until January 2015 the implementation of the 2014 rate floor, and then phases-in potential universal service support reductions associated with the rate floor. As a result, the universal service support reductions that go into effect in January of next year will be for only those lines with rates below $16, with no further increases until July 2016. Subsequent to July 2016, any potential reductions in universal service support will be phased in gradually through 2018. Moreover, the Commission ' s April Order exempts lines serving low-income households through the Lifeline program from any universal service support reductions associated with the rate floor. We took these steps to address concerns such as those you mentioned regarding "unnecessarily excessive" rate increases and possible difficulties some carriers may experience in making rate adjustments at the state level in a short period of time. Recipients of support are required to report semi-annually to the Commission the number of lines with rates below the rate floor, though, under the phase-in approach adopted by the Commission, no support reductions will occur for lines with rates below $16 until July 2016. This semi-annual report affords us an opportunity to collect and analyze hard data. I agree with you that we should use the information collected from carriers to evaluate how our implementation of this rule is affecting rural consumers and the achievement of our universal service goals, including, as you recognized, ensuring that neither rural nor urban consumers are subsidizing artificially low rates for a small number of consumers in some states. I will be particularly interested in how the data collected in January and July 2015 differs from the information we have collected in previous years. We have actually seen minimal impact on consumers since the Commission implemented this rule in 2012. The rate floor increased to $14 in 2013 from $10 in 2012, a 40 percent increase. However, consistent with our rules, many carriers apparently did not raise their local rates, and continue to report lines with rates well below the $14 rate floor. Moreover, in 2014, carriers in 41 study areas in 16 states Page 2- The Honorable Tammy Baldwin were still reporting a number of residential local service charges of$5 or less, further confmning that individual carriers may choose not to raise rates in response to the current rate floor. Please be assured that the Commiss ion will take into consideration the concerns of all stakeholders as we endeavor to protect rural consumers from excessive rate hikes. l appreciate your interest in this matter. Please let me know ifl can be of any further assistance Sincerely, FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OfFICE OF THE CHAIR M AN The Honorable Roy Blunt United States Senate 260 Russell Senate Office Building Washington, D.C. 20510 Dear Senator Blunt: October 24, 2014 Thank you for your letter expressing concerns on the implementation of the urban rate floor. I appreciate your views and will ensure that your letter will be included in the record of the proceeding and considered as part of the Commission's review. As you note, the Commission Order adopted in April2014 both delays until January 2015 the implementation ofthe 2014 rate floor, and then phases-in potential universal service support reductions associated with the rate floor. As a result, the universal service support reductions that go into effect in January of next year will be for only those lines with rates below $16, with no further increases until July 2016. Subsequent to July 2016, any potential reductions in universal service support will be phased in gradually through 2018. Moreover, the Commission ' s April Order exempts lines serving low-income households through the Lifeline program from any universal service support reductions associated with the rate floor. We took these steps to address concerns such as those you mentioned regarding "unnecessarily excessive" rate increases and possible difficulties some carriers may experience in making rate adjustments at the state level in a short period of time. Recipients of support are required to report semi-annually to the Commission the number of lines with rates below the rate floor, though, under the phase-in approach adopted by the Commission, no support reductions will occur for lines with rates below $16 until July 2016. This semi-annual report affords us an opportunity to collect and analyze hard data. I agree with you that we should use the information co llected from carriers to evaluate how our implementation of this rule is affecting rural consumers and the achievement of our universal service goals, including, as you recognized, ensuring that neither rural nor urban consumers are subsidizing artificially low rates for a small number of consumers in some states. 1 will be particularly interested in how the data collected in January and July 2015 differs from the information we have collected in previous years. We have actually seen minimal impact on consumers since the Commission implemented this rule in 2012. The rate floor increased to $14 in 2013 from $10 in 2012, a 40 percent increase. However, consistent with our rules, many carriers apparently did not raise their local rates, and continue to report lines with rates well below the $14 rate floor. Moreover, in 2014, carriers in 41 study areas in 16 states Page 2- The Honorable Roy Blunt were still reporting a number of residential local service charges of$5 or less, further confirming that individual carriers may choose not to raise rates in response to the current rate floor. Please be assured that the Commission will take into consideration the concerns of all stakeholders as we endeavor to protect rural consumers from excessive rate hikes. I appreciate your interest in this matter. Please let me know if 1 can be of any further assistance FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIR~AN The Honorable John Boozman United States Senate 320 Hart Senate Office Building Washington, D.C. 20510 Dear Senator Boozman: October 24, 2014 Thank you for your letter expressing concerns on the implementation of the urban rate floor. I appreciate your views and will ensure that your letter will be included in the record of the proceeding and considered as part of the Commission's review. As you note, the Commission Order adopted in April2014 both delays until January 2015 the implementation of the 2014 rate floor, and then phases-in potential universal service support reductions associated with the rate floor. As a result, the universal service support reductions that go into effect in January of next year will be for only those lines with rates below $16, with no further increases until July 2016. Subsequent to July 2016, any potential reductions in universal service support will be phased in gradually through 2018. Moreover, the Commission's April Order exempts lines serving low-income households through the Lifeline program from any universal service support reductions associated with the rate floor. We took these steps to address concerns such as those you mentioned regarding "unnecessarily excessive" rate increases and possible difficulties some carriers may experience in making rate adjustments at the state level in a short period of time. Recipients of support are required to report semi-annually to the Commission the number of lines with rates below the rate floor, though, under the phase-in approach adopted by the Commission, no support reductions will occur for lines with rates below $16 until July 2016. This semi-annual report affords us an opportunity to collect and analyze hard data. I agree with you that we should use the information collected from carriers to evaluate how our implementation of this rule is affecting rural consumers and the achievement of our universal service goals, including, as you recognized, ensuring that neither rural nor urban consumers are subsidizing artificially low rates for a small number of consumers in some states. I will be particularly interested in how the data collected in January and July 2015 differs from the information we have collected in previous years. We have actually seen minimal impact on consumers since the Commission implemented this rule in 2012. The rate floor increased to $14 in 2013 from $10 in 2012, a 40 percent increase. However, consistent with our rules, many carriers apparently did not raise their local rates, and continue to report lines with rates well below the $14 rate floor. Moreover, in 2014, carriers in 41 study areas in 16 states Page 2- The Honorable John Boozman were still reporting a number of residential local service charges of $5 or less, further confmning that individual carriers may choose not to raise rates in response to the current rate floor. Please be assured that the Commission will take into consideration the concerns of all stakeholders as we endeavor to protect rural consumers from excessive rate hikes. I appreciate your interest in this matter. Please let me know ifl can be of any further assistance Sincerely, . fA I / ~ ~ ... , !fts-_ !-- Tom Wheeler FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFF IC E O F T H E C HAIRMA N The Honorable Maria Cantwell United States Senate 311 Hart Senate Office Building Washington, D.C. 20510 Dear Senator Cantwell: October 24, 2014 Thank you for your letter expressing concerns on the implementation of the urban rate floor. I appreciate your views and will ensure that your letter will be included in the record of the proceeding and considered as part of the Commission's review. As you note, the Commission Order adopted in April2014 both delays until January 2015 the implementation of the 2014 rate floor, and then phases-in potential universal service support reductions associated with the rate floor. As a result, the universal service support reductions that go into effect in January of next year will be for only those lines with rates below $16, with no further increases until July 2016. Subsequent to July 2016, any potential reductions in universal service support will be phased in gradually through 2018. Moreover, the Commission's April Order exempts lines serving low-income households through the Lifeline program from any universal service support reductions associated with the rate floor. We took these steps to address concerns such as those you mentioned regarding "unnecessarily excessive" rate increases and possible difficulties some carriers may experience in making rate adjustments at the state level in a short period oftime. Recipients of support are required to report semi-annually to the Commission the number oflines with rates below the rate floor, though, under the phase-in approach adopted by the Commission, no support reductions will occur for lines with rates below $16 until July 2016. This semi-annual report affords us an opportunity to collect and analyze hard data. I agree with you that we should use the information collected from carriers to evaluate how our implementation of this rule is affecting rural consumers and the achievement of our universal service goals, including, as you recognized, ensuring that neither rural nor urban consumers are subsidizing artificially low rates for a small number of consumers in some states. I will be particularly interested in how the data collected in January and July 2015 differs from the information we have collected in previous years. We have actually seen minimal impact on consumers since the Commission implemented this rule in 2012. The rate floor increased to $14 in 2013 from $10 in 2012, a 40 percent increase. However, consistent with our rules, many carriers apparently did not raise their local rates, and continue to report lines with rates well below the $14 rate floor. Moreover, in 2014, carriers in 41 study areas in 16 states Page 2- The Honorable Maria Cantwell were sti ll reporting a number of residential local service charges of $5 or less, further conftrming that individual carriers may choose not to raise rates in response to the current rate floor. Please be assured that the Commission will take into consideration the concerns of all stakeholders as we endeavor to protect rural consumers from excessive rate hikes. I appreciate your interest in this matter. Please let me know ifl can be of any further assistance smcer•luC/ -;e;:eler FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRM AN The Honorable Dan Coats United States Senate 493 Russell Senate Office Building Washington, D.C. 20510 Dear Senator Coats: October 24, 2014 Thank you for your letter expressing concerns on the implementation of the urban rate floor. I appreciate your views and will ensure that your letter will be included in the record of the proceeding and considered as part of the Commission's review. As you note, the Commission Order adopted in April 2014 both delays until January 2015 the implementation of the 2014 rate floor, and then phases-in potential universal service support reductions associated with the rate floor. As a result, the universal service support reductions that go into effect in January of next year will be for only those lines with rates below $16, with no further increases until July 2016. Subsequent to July 2016, any potential reductions in universal service support will be phased in gradually through 2018. Moreover, the Commission ' s April Order exempts lines serving low-income households through the Lifeline program from any universal service support reductions associated with the rate floor. We took these steps to address concerns such as those you mentioned regarding "unnecessarily excessive" rate increases and possible difficulties some carriers may experience in making rate adjustments at the state level in a short period of time. Recipients of support are required to report semi-annually to the Commission the number of lines with rates below the rate floor, though, under the phase-in approach adopted by the Commission, no support reductions will occur for lines with rates below $16 until July 2016. This semi-annual report affords us an opportunity to collect and analyze hard data. I agree with you that we should use the information collected from carriers to evaluate how our implementation of this rule is affecting rural consumers and the achievement of our universal service goals, including, as you recognized, ensuring that neither rural nor urban consumers are subsidizing artificially low rates for a small number of consumers in some states. I will be particularly interested in how the data co11ected in January and July 2015 differs from the information we have collected in previous years. We have actually seen minimal impact on consumers since the Commission implemented this rule in 2012. The rate floor increased to $14 in 2013 from $10 in 2012, a 40 percent increase. However, consistent with our rules, many carriers apparently did not raise their local rates, and continue to report lines with rates well below the $14 rate floor. Moreover, in 2014, carriers in 41 study areas in 16 states Page 2- The Honorable Dan Coats were still reporting a number of residential local service charges of $5 or less, further conflillling that individual carriers may choose not to raise rates in response to the current rate floor. Please be assured that the Commission will take into consideration the concerns of all stakeholders as we endeavor to protect rural consumers from excessive rate hikes. 1 appreciate your interest in this matter. Please let me know ifl can be of any further assistance _ Sffirerelyli(__ ~eeler FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFF'IC£ OF' THE CHAIRMAN The Honorable Susan Collins United States Senate 413 Dirksen Senate Office Building Washington, D.C. 20510 Dear Senator Collins: October 24, 2014 Thank you for your letter expressing concerns on the implementation of the urban rate floor. I appreciate your views and will ensure that your letter will be included in the record of the proceeding and considered as part of the Commission's review. As you note, the Commission Order adopted in April 2014 both delays until January 2015 the implementation of the 2014 rate floor, and then phases-in potential universal service support reductions associated with the rate floor. As a result, the universal service support reductions that go into effect in January of next year will be for only those lines with rates below $16, with no further increases until July 2016. Subsequent to July 2016, any potential reductions in universal service support will be phased in gradually through 20 18. Moreover, the Commission's April Order exempts lines serving low-income households through the Lifeline program from any universal service support reductions associated with the rate floor. We took these steps to address concerns such as those you mentioned regarding "unnecessarily excessive" rate increases and possible difficulties some carriers may experience in making rate adjustments at the state level in a short period of time. Recipients of support are required to report semi-annually to the Commission the number of lines with rates below the rate floor, though, under the phase-in approach adopted by the Commission, no support reductions will occur for lines with rates below $16 until July 2016. This semi-annual report affords us an opportunity to collect and analyze hard data. I agree with you that we should use the information collected from carriers to evaluate how our implementation of this rule is affecting rural consumers and the achievement of our universal service goals, including, as you recognized, ensuring that neither rural nor urban consumers are subsidizing artificially low rates for a small number of consumers in some states. I will be particularly interested in how the data collected in January and July 2015 differs from the information we have collected in previous years. We have actually seen minimal impact on consumers since the Commission implemented this rule in 2012. The rate floor increased to $14 in 2013 from $10 in 2012, a 40 percent increase. However, consistent with our rules, many carriers apparently did not raise their local rates, and continue to report lines with rates well below the $14 rate floor. Moreover, in 2014, carriers in 41 study areas in 16 states Page 2- The Honorable Susan Collins were still reporting a number of residential local service charges of$5 or less, further confirming that individual carriers may choose not to raise rates in response to the current rate floor. Please be assured that the Commission will take into consideration the concerns of all stakeholders as we endeavor to protect rural consumers from excessive rate hikes. I appreciate your interest in this matter. Please let me know ifl can be of any further assistance _ Sillcere~l- ~heeler FEDERAL COMMUNICATIONS C O M MI SSION WASHINGTON OFFICE OF THE CHAIR MAN The Honorable Al Franken United States Senate 309 Hart Senate Office Building Washington, D.C. 20510 Dear Senator Franken: October 24, 2014 Thank you for your letter expressing concerns on the implementation of the urban rate floor. I appreciate your views and will ensure that your letter will be included in the record of the proceeding and considered as part of the Commission ' s review. As you note, the Commission Order adopted in April2014 both delays until January 2015 the implementation of the 2014 rate Door, and then phases-in potential universal service support reductions associated with the rate floor. As a result, the universal service support reductions that go into effect in January of next year will be for only those lines with rates below $16, with no further increases untilJuly 2016. Subsequent to July 2016, any potential reductions in universal service support will be phased in gradually through 2018. Moreover, the Commission ' s April Order exempts lines serving low-income households through the Lifeline program from any universal service support reductions associated with the rate floor. We took these steps to address concerns such as those you mentioned regarding "unnecessarily excessive" rate increases and possible difficulties some carriers may experience in making rate adjustments at the state level in a short period of time. Recipients of support are required to report semi-annually to the Commission the number of lines with rates below the rate floor, though, under the phase-in approach adopted by the Commission, no support reductions will occur for lines with rates below $16 until July 2016. This semi-annual report affords us an opportunity to collect and analyze hard data. I agree with you that we should use the information collected from carriers to evaluate how our implementation of this rule is affecting rural consumers and the achievement of our universal service goals, including, as you recognized, ensuring that neither rural nor urban consumers arc subsidizing artificially low rates for a small number of consumers in some states. I will be particularly interested in how the data collected in January and July 2015 differs from the information we have collected in previous years. We have actually seen minimal impact on consumers since the Commission implemented this rule in 2012. The rate Door increased to $14 in 2013 from $10 in 2012, a 40 percent increase. However, consistent with our rules, many carriers apparently did not raise their local rates, and continue to report lines with rates well below the $14 rate floor. Moreover, in 2014, carriers in 41 study areas in 16 states Page 2- The Honorable AI Franken were still reporting a number of residential local service charges of$5 or less, further confmning that individual carriers may choose not to raise rates in response to the current rate floor. Please be assured that the Commission will take into consideration the concerns of all stakeholders as we endeavor to protect rural consumers from excessive rate hikes. I appreciate your interest in this matter. Please let me know ifl can be of any further assistance Sincerely, ~eelcr FEDERAL COMMUNICATIONS COMMISSION W ASH I NGTON OFFICE OF THE CHAIRMAN The Honorable Charles Grass ley United States Senate 135 Hart Senate Office Building Washington, D.C. 20510 Dear Senator Grass ley: October 24, 2014 Thank you for your letter expressing concerns on the implementation of the urban rate floor. I appreciate your views and will ensure that your letter will be included in the record of the proceeding and considered as part of the Commission's review. As you note, the Commission Order adopted in April2014 both delays until January 2015 the implementation of the 2014 rate floor, and then phases-in potential universal service support reductions associated with the rate floor. As a result, the universal service support reductions that go into effect in January of next year will be for only those lines with rates below $16, with no further increases until July 2016. Subsequent to July 2016, any potential reductions in universal service support will be phased in gradually through 2018. Moreover, the Commission ' s April Order exempts lines serving low-income households through the Lifeline program from any universal service support reductions associated with the rate floor. We took these steps to address concerns such as those you mentioned regarding "unnecessarily excessive" rate increases and possible difficulties some carriers may experience in making rate adjustments at the state level in a short period of time. Recipients of support are required to report semi-annually to the Commission the number of lines with rates below the rate floor, though, under the phase-in approach adopted by the Commission, no support reductions will occur for lines with rates below $16 until July 2016. This semi-annual report affords us an opportunity to collect and analyze hard data. I agree with you that we should use the information collected from carriers to evaluate how our implementation of this rule is affecting rural consumers and the achievement of our universal service goals, including, as you recognized, ensuring that neither rural nor urban consumers are subsidizing artificially low rates for a small number of consumers in some states. I will be particularly interested in how the data collected in January and July 2015 differs from the information we have collected in previous years. We have actually seen minimal impact on consumers since the Commission implemented this rule in 2012. The rate floor increased to $14 in 2013 from $10 in 20 12, a 40 percent increase. However, consistent with our rules, many carriers apparently did not raise their local rates, and continue to report lines with rates well below the $14 rate floor. Moreover, in 2014, carriers in 41 study areas in 16 states Page 2- The Honorable Charles Grassley were still reporting a number of residential local service charges of$5 or less, further confirming that individual carriers may choose not to raise rates in response to the current rate floor. Please be assured that the Commission will take into consideration the concerns of all stakeholders as we endeavor to protect rural consumers from excessive rate hikes. I appreciate your interest in this matter. Please let me know ifl can be of any further assistance _ SIDcereJY1{£- ~heeler FEDERAL COMMUNICATIONS COMMISS ION WASHINGTON OFFICE OF THE CHAIR M AN The Honorable Tom Harkin United States Senate 731 Hart Senate Office Building Washington, D.C. 20510 Dear Senator Harkin: October 24, 2014 Thank you for your letter expressing concerns on the implementation of the urban rate floor. I appreciate your views and will ensure that your letter will be included in the record of the proceeding and considered as part of the Commission's review. As you note, the Commission Order adopted in April2014 both delays until January 2015 the implementation of the 2014 rate floor, and then phases-in potential universal service support reductions associated with the rate floor. As a result, the universal service support reductions that go into effect in January of next year will be for only those lines with rates below $16, with no further increases until July 2016. Subsequent to July 2016, any potential reductions in universal service support will be phased in gradually through 20 18. Moreover, the Commission's April Order exempts lines serving low-income households through the Lifeline program from any universal service support reductions associated with the rate floor. We took these steps to address concerns such as those you mentioned regarding "unnecessarily excessive" rate increases and possible difficulties some carriers may experience in making rate adjustments at the state level in a short period of time. Recipients of support are required to report semi-annually to the Commission the number of lines with rates below the rate floor, though, under the phase-in approach adopted by the Commission, no support reductions will occur for lines with rates below $16 until July 2016. This semi-annual report affords us an opportunity to collect and analyze hard data. I agree with you that we should use the information collected from carriers to evaluate how our implementation of this rule is affecting rural consumers and the achievement of our universal service goals, including, as you recognized, ensuring that neither rural nor urban consumers are subsidizing artificially low rates for a small number of consumers in some states. I will be particularly interested in how the data collected in January and July 2015 differs from the information we have collected in previous years. We have actually seen minimal impact on consumers since the Commission implemented this rule in 2012. The rate floor increased to $14 in 2013 from $10 in 2012, a 40 percent increase. However, consistent with our rules, many carriers apparently did not raise their local rates, and continue to report lines with rates well below the $14 rate floor. Moreover, in 2014, carriers in 41 study areas in 16 states Page 2- The Honorable Tom Harkin were still reporting a number of residential local service charges of $5 or less, further confrrming that individual carriers may choose not to raise rates in response to the current rate floor. Please be assured that the Commission will take into consideration the concerns of all stakeholders as we endeavor to protect rural consumers from excessive rate hikes. I appreciate your interest in this matter. Please let me know ifl can be of any further assistance FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAI R M AN The Honorable James Inhofe United States Senate 453 Russell Senate Office Building Washington, D.C. 20510 Dear Senator lnhofe: October 24, 2014 Thank you for your letter expressing concerns on the implementation of the urban rate floor. 1 appreciate your views and will ensure that your letter will be included in the record of the proceeding and considered as part of the Commission's review. As you note, the Commission Order adopted in April2014 both delays until January 2015 the implementation of the 2014 rate floor, and then phases-in potential universal service support reductions associated with the rate floor. As a result, the universal service support reductions that go into effect in January of next year will be for only those lines with rates below $16, with no further increases until July 2016. Subsequent to July 2016, any potential reductions in universal service support will be phased in gradually through 2018. Moreover, the Commission's April Order exempts lines serving low-income households through the Lifeline program from any universal service support reductions associated with the rate floor. We took these steps to address concerns such as those you mentioned regarding "unnecessarily excessive" rate increases and possible difficulties some carriers may experience in making rate adjustments at the state level in a short period of time. Recipients of support are required to report semi-annually to the Commission the number of lines with rates below the rate floor, though, under the phase-in approach adopted by the Commission, no support reductions will occur for lines with rates below $16 until July 2016. This semi-annual report affords us an opportunity to collect and analyze hard data. I agree with you that we should use the information collected from carriers to evaluate how our implementation ofthis rule is affecting rural consumers and the achievement of our universal service goals, including, as you recognized, ensuring that neither rural nor urban consumers are subsidizing artificially low rates for a small number of consumers in some states. I will be particularly interested in how the data collected in January and July 2015 differs from the information we have collected in previous years. We have actually seen minimal impact on consumers since the Commission implemented this rule in 2012. The rate floor increased to $14 in 2013 from $10 in 2012, a 40 percent increase. However, consistent with our rules, many carriers apparently did not raise their local rates, and continue to report lines with rates well below the $14 rate floor. Moreover, in 2014, carriers in 41 study areas in 16 states Page 2- The Honorable James Inhofe were still reporting a number of residential local service charges of $5 or less, further conft.rming that individual carriers may choose not to raise rates in response to the current rate floor. Please be assured that the Commission will take into consideration the concerns of all stakeholders as we endeavor to protect rural consumers from excessive rate hikes. I appreciate your interest in this matter. Please let me know ifl can be of any further assistance Sincerely,~ ~eler £- FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OF"FICE OF" THE CHAI R MAN The Honorable Tim Johnson United States Senate 136 Hart Senate Office Building Washington, D.C. 20510 Dear Senator Johnson: October 24,2014 Thank you for your letter expressing concerns on the implementation of the urban rate floor. I appreciate your views and will ensure that your letter will be included in the record of the proceeding and considered as part of the Commission's review. As you note, the Commission Order adopted in April 2014 both delays until January 2015 the implementation of the 2014 rate floor, and then phases-in potential universal service support reductions associated with the rate floor. As a result, the universal service support reductions that go into effect in January of next year will be for only those lines with rates below $16, with no further increases until July 2016. Subsequent to July 2016, any potential reductions in universal service support will be phased in gradually through 2018. Moreover, the Commission' s April Order exempts lines serving low-income households through the Lifeline program from any universal service support reductions associated with the rate floor. We took these steps to address concerns such as those you mentioned regarding "unnecessarily excessive" rate increases and possible difficulties some carriers may experience in making rate adjustments at the state level in a short period of time. Recipients of support are required to report semi-annually to the Commission the number of lines with rates below the rate floor, though, under the phase-in approach adopted by the Commission, no support reductions will occur for lines with rates below $16 until July 2016. This semi-annual report affords us an opportunity to collect and analyze hard data. 1 agree with you that we should use the information collected from carriers to evaluate how our implementation ofthis rule is affecting rural consumers and the achievement of our universal service goals, including, as you recognized, ensuring that neither rural nor urban consumers are subsidizing artificially low rates for a small number of consumers in some states. I will be particularly interested in how the data collected in January and July 2015 differs from the information we have collected in previous years. We have actually seen minimal impact on consumers since the Commission implemented this rule in 2012. The rate floor increased to $14 in 2013 from $10 in 2012, a 40 percent increase. However, consistent with our rules, many carriers apparently did not raise their local rates, and continue to report lines with rates well below the $14 rate floor. Moreover, in 2014, carriers in 41 study areas in 16 states Page 2- The Honorable Tim Johnson were still reporting a number of residential local service charges of $5 or less, further confmning that individual carriers may choose not to raise rates in response to the current rate floor. Please be assured that the Commission will take into consideration the concerns of all stakeholders as we endeavor to protect rural consumers from excessive rate hikes. I appreciate your interest in this matter. P lease let me know ifl can be of any further assistance ~ ([- Tom Wheeler FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAI R M AN The Honorable Amy Klobuchar United States Senate 302 Hart Senate Office Building Washington, D.C. 20510 Dear Senator Klobuchar: October 24, 2014 Thank you for your letter expressing concerns on the implementation of the urban rate floor. I appreciate your views and will ensure that your letter will be included in the record of the proceeding and considered as part of the Commission' s review. As you note, the Commission Order adopted in April2014 both delays until January 2015 the implementation of the 2014 rate floor, and then phases-in potential universal service support reductions associated with the rate floor. As a result, the universal service support reductions that go into effect in January of next year will be for only those lines with rates below $16, with no further increases until July 2016. Subsequent to July 2016, any potential reductions in universal service support will be phased in gradually through 2018. Moreover, the Commission's April Order exempts lines serving low-income households through the Lifeline program from any universal service support reductions associated with the rate floor. We took these steps to address concerns such as those you mentioned regarding "unnecessarily excessive" rate increases and possible difficulties some carriers may experience in making rate adjustments at the state level in a short period of time. Recipients of support are required to report semi-annually to the Commission the number of lines with rates below the rate floor, though, under the phase-in approach adopted by the Commission, no support reductions will occur for lines with rates below $16 until July 2016. This semi-annual report affords us an opportunity to collect and analyze hard data. I agree with you that we should use the information collected from carriers to evaluate how our implementation of this rule is affecting rural consumers and the achievement of our universal service goals, including, as you recognized, ensuring that neither rural nor urban consumers are subsidizing artificially low rates for a small number of consumers in some states. I will be particularly interested in how the data collected in January and July 2015 differs from the information we have collected in previous years. We have actually seen minimal impact on consumers since the Commission implemented this rule in 2012. The rate floor increased to $14 in 2013 from $10 in 2012, a 40 percent increase. However, consistent with our rules, many carriers apparently did not raise their local rates, and continue to report lines with rates well below the $14 rate floor. Moreover, in 2014, carriers in 41 study areas in 16 states Page 2- The Honorable Amy Klobuchar were still reporting a number of residential local service charges of $5 or Jess, further confirming that individual carriers may choose not to raise rates in response to the current rate floor. Please be assured that the Commission will take into consideration the concerns of all stakeholders as we endeavor to protect rural consumers from excessive rate hikes. I appreciate your interest in this matter. Please let me know ifl can be of any further assistance FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAI RMAN The Honorable Jerry Moran United States Senate 345 Russell Senate Office Building Washington, D.C. 20510 Dear Senator Moran: October 24, 2014 Thank you for your letter expressing concerns on the implementation of the urban rate floor. I appreciate your views and will ensure that your letter will be included in the record of the proceeding and considered as part of the Commission' s review. As you note, the Commission Order adopted in April20 14 both delays until January 2015 the implementation of the 2014 rate floor, and then phases-in potential universal service support reductions associated with the rate floor. As a result, the universal service support reductions that go into effect in January of next year will be for only those lines with rates below $16, with no further increases until July 2016. Subsequent to July 2016, any potential reductions in universal service support will be phased in gradually through 2018. Moreover, the Commission' s April Order exempts lines serving low-income households through the Lifeline program from any universal service support reductions associated with the rate floor. We took these steps to address concerns such as those you mentioned regarding "unnecessarily excessive" rate increases and possible difficulties some carriers may experience in making rate adjustments at the state level in a short period of time. Recipients of support are required to report semi-annually to the Commission the number of lines with rates below the rate floor, though, under the phase-in approach adopted by the Commission, no support reductions will occur for lines with rates below $16 until July 2016. This semi-annual report affords us an opportunity to collect and analyze hard data. I agree with you that we should use the information collected from carriers to evaluate how our implementation of this rule is affecting rural consumers and the achievement of our universal service goals, including, as you recognized, ensuring that neither rural nor urban consumers are subsidizing artificially low rates for a small number of consumers in some states. I will be particularly interested in how the data collected in January and July 2015 differs from the information we have collected in previous years. We have actually seen minimal impact on consumers since the Commission implemented this rule in 2012. The rate floor increased to $14 in 2013 from $10 in 2012, a 40 percent increase. However, consistent with our rules, many carriers apparently did not raise their local rates, and continue to report lines with rates well below the $14 rate floor. Moreover, in 2014, carriers in 41 study areas in 16 states Page 2- The Honorable Jerry Moran were still reporting a number of residential local service charges of $5 or less, further confmning that individual carriers may choose not to raise rates in response to the current rate floor. Please be assured that the Commission will take into consideration the concerns of all stakeholders as we endeavor to protect rural consumers from excessive rate hikes. I appreciate your interest in this matter. Please let me know ifl can be of any further assistance J:Yf~~ Tom Wheeler FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF T H E CHAIR M A N The Honorable Patty Murray United States Senate 173 Russell Senate Office Building Washington, D.C. 20510 Dear Senator Murray: October 24, 2014 Thank you for your letter expressing concerns on the implementation of the urban rate floor. I appreciate your views and will ensure that your letter will be included in the record of the proceeding and considered as part of the Commission' s review. As you note, the Commission Order adopted in April 2014 both delays until January 2015 the implementation of the 2014 rate floor, and then phases-in potential universal service support reductions associated with the rate floor. As a result, the universal service support reductions that go into effect in January of next year will be for only those lines with rates below $16, with no further increases until July 2016. Subsequent to July 2016, any potential reductions in universal service support will be phased in gradually through 2018. Moreover, the Commission ' s April Order exempts lines serving low-income households through the Lifeline program from any universal service support reductions associated with the rate floor. We took these steps to address concerns such as those you mentioned regarding "unnecessarily excessive" rate increases and possible difficulties some carriers may experience in making rate adjustments at the state level in a short period of time. Recipients of support are required to report semi-annua!Jy to the Commission the number of lines with rates below the rate floor, though, under the phase-in approach adopted by the Commission, no support reductions will occur for lines with rates below $16 until July 2016. This semi-annual report affords us an opportunity to collect and analyze hard data. I agree with you that we should use the information collected from carriers to evaluate how our implementation of this rule is affecting rural consumers and the achievement of our universal service goals, including, as you recognized, ensuring that neither rural nor urban consumers are subsidizing artificially low rates for a small number of consumers in some states. I will be particularly interested in how the data collected in January and July 2015 differs from the information we have collected in previous years. We have actually seen minimal impact on consumers since the Commission implemented this rule in 2012. The rate floor increased to $14 in 2013 from $10 in 2012, a 40 percent increase. However, consistent with our rules, many carriers apparently did not raise their local rates, and continue to report lines with rates well below the $14 rate floor. Moreover, in 2014, carriers in 41 study areas in 16 states Page 2- The Honorable Patty Murray were still reporting a number of residential local service charges of $5 or less, further confmning that individual carriers may choose not to raise rates in response to the current rate floor. Please be assured that the Commission will take into consideration the concerns of all stakeholders as we endeavor to protect rural consumers from excessive rate hikes. I appreciate your interest in this matter. Please let me know if I can be of any further assistance Sincerely, / ( / - ~$-J-. Tom Wheeler FEDERAL COMMUNICATIONS COMM I SSION WASHINGTON OFFICE OF THE CHAIR M AN The Honorable Pat Roberts United States Senate 109 Hart Senate Office Building Washington, D.C. 20510 Dear Senator Roberts: October 24,2014 Thank you for your letter expressing concerns on the implementation of the urban rate floor. I appreciate your views and will ensure that your letter will be included in the record of the proceeding and considered as part of the Commission's review. As you note, the Commission Order adopted in April2014 both delays until January 2015 the implementation of the 2014 rate floor, and then phases-in potential universal service support reductions associated with the rate floor. As a result, the universal service support reductions that go into effect in January of next year will be for only those lines with rates below $16, with no further increases until July 2016. Subsequent to July 2016, any potential reductions in universal service support will be phased in gradually through 2018. Moreover, the Commission's April Order exempts lines serving low-income households through the Lifeline program from any universal service support reductions associated with the rate floor. We took these steps to address concerns such as those you mentioned regarding "unnecessarily excessive" rate increases and possible difficulties some carriers may experience in making rate adjustments at the state level in a short period of time. Recipients of support are required to report semi-annually to the Commission the number of lines with rates below the rate floor, though, under the phase-in approach adopted by the Commission, no support reductions will occur for lines with rates below $16 until July 2016. This semi-annual report affords us an opportunity to collect and analyze hard data. I agree with you that we should use the information collected from carriers to evaluate how our implementation of this rule is affecting rural consumers and the achievement of our universal service goals, including, as you recognized, ensuring that neither rural nor urban consumers are subsidizing artificially low rates for a small number of consumers in some states. I will be particularly interested in how the data collected in January and July 2015 differs from the information we have collected in previous years. We have actually seen minimal impact on consumers since the Commission implemented this rule in 2012. The rate floor increased to $14 in 2013 from $10 in 2012, a 40 percent increase. However, consistent with our rules, many carriers apparently did not raise their local rates, and continue to report lines with rates well below the $14 rate floor. Moreover, in 2014, carriers in 41 study areas in 16 states Page 2- The Honorable Pat Roberts were still reporting a number of residential local service charges of $5 or less, further confuming that individual carriers may choose not to raise rates in response to the current rate floor. Please be assured that the Commission will take into consideration the concerns of all stakeholders as we endeavor to protect rural consumers from excessive rate hikes. I appreciate your interest in this matter. Please let me know if I can be of any further assistance ~ Tom Wheeler