Media Contact: 
Mark Wigfield, (202) 418-0253
mark.wigfield@fcc.gov
For Immediate Release
FCC HALTS RURAL PHONE RATE HIKE
Freezes ‘Rate Floor’ Pending Further Review 
  --
WASHINGTON, May 18, 2017 – The Federal Communications Commission today stopped a 
federally mandated rate increase for certain rural phone customers, pending review of an FCC 
policy known as the “rate floor.”
The FCC froze the current minimum rate for local voice services at $18 per month for customers
of companies that receive support from the FCC’s universal service program. That minimum 
rate, or rate floor, was scheduled to rise to $20 on July 1, and to $22 on July 1, 2018.
The freeze will stay in effect until the FCC reviews its rate floor policy, or no more than two 
years.  The review was launched by the Commission today in a Notice of Proposed Rulemaking 
seeking comment on the policy.
In rural areas where the cost of providing service is high, phone company revenues come from 
three primary sources: customer rates, subsidies from the Universal Service Fund to keep those 
rates affordable, and intercarrier payments from long-distance providers. In 2011 the FCC set a 
rate floor for local voice services based on a national average; carriers that do not to charge their 
customers at least the rate floor amount are penalized with a loss of universal service funding.
However, stakeholders ranging from the AARP to the National Tribal Telecommunications 
Association to small, rural telephone companies have argued that the rate floor has made basic 
voice service less affordable in some rural areas, resulted in rural rates that are higher than in 
some urban areas, limited consumer choice, and slowed broadband deployment.
In response, the FCC will seek comment on whether the rate floor has met its intended purposes, 
whether changes should be made to the current rate floor methodology, or whether it should be 
eliminated entirely. More generally, the FCC will seek comment on the costs and benefits of the 
rate floor.
Action by the Commission May 18, 2017 by Notice of Proposed Rulemaking (FCC 17-61). 
Chairman Pai and Commissioner O’Rielly approving. Commissioner Clyburn dissenting. 
Chairman Pai, Commissioners Clyburn and O’Rielly issuing separate statements.  
WC Docket No. 10-90
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This is an unofficial announcement of Commission action.  Release of the full text of a Commission order constitutes 
official action.  See MCI v. FCC, 515 F.2d 385 (D.C. Cir. 1974).