FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Mike Bost U.S. House of Representatives 1440 Longworth House Office Building Washington, D.C. 20515 Dear Congressman Bost: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. Jn my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rmal America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn1t exist for some rural telephone companies - not because consumers didn1t want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Retum Order - vvhich I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband ~/ould put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in ma!ly ways made it harder, not easier, for small providers to serve rural, America. Nor, as J predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the ce1iainty they need to make the long-term inv~stment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Mike Bost support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, v. Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Cheri Bustos U.S. House of Representatives 1009 Longworth House Office Building Washington, D.C. 20515 Dear Congresswoman Bustos: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get suppmi while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband . The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Ra,te-of­ Retum Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, Ainerica. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-tenn investment decisions that will lead to greater conriectivity. It has become clear, as my colleagues and I have worked our way through the so--called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2- The Honorable Cheri Bustos support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, v. Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CH A I RM AN The Honorable Doug Collins U.S. House of Representatives 1504 Longworth House Office Building Washington, D.C. 20515 Dear Congressman Collins: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas . Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband . The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Retum Order- which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Doug Collins support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, v. Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHIN G TON OFF ICE O F THE CHAIRMAN The Honorable John Cornyn United States Senate 517 Hart Senate Office Building Washington, D.C. 20510 Dear Senator Cornyn: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfo1tunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predisted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable John Cornyn support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Kevin Cramer U.S. House of Representatives 1717 Longworth House Office Building Washington, D.C. 20515 Dear Congressman Cramer: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas . Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Kevin Cramer support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of suppo11 to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, V· AjitV. Pai FEDERAL COMMUNICATIONS COMMISSION WASH I NGTON OFF ICE OF THE C H AIRMAN The Honorable Rick Crawford U.S. House of Representatives 2422 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Crawford: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Retum Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Rick Crawford support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those caniers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, v. Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFF ICE OF THE CHAIRMAN The Honorable Rodney Davis U.S. House of Representatives 1740 Longworth House Office Building Washington, D.C. 20515 Dear Congressman Davis: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers ''sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Rodney Davis support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, v. Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Sean P. Duffy U.S. House of Representatives 2330 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Duffy: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas . Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority wol!ld be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support \Vhile standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn1t exist for some rural telephone companies - not because consumers didn1t want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms,'' the Commission's 2016 Rate-of­ Return Order- which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list-of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Sean P. Duffy support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. . _ ~sinVe.ly, ~ ~ Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFF ICE OF THE CHAIRMAN The Honorable Jeff Duncan U.S. House of Representatives 2229 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Duncan: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn1t exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commiss10n's 2016 Rate-of­ Retum Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisi01is that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Jeff Duncan support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, v. Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Mike Gallagher U.S. House of Representatives 1007 Longworth House Office Building Washington, D.C. 20515 Dear Congressman Gallagher: October 24, 201 7 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get suppo1i \Vhile standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve iural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures. " Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater cormectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Mike Gallagher support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the unce1iainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, V· Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFF I CE OF THE CHAIRMAN The Honorable John Garamendi U.S. House of Representatives 2438 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Garamer.di: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to c:ill Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those iiving in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated scpp01t on providing voice s'ervice. This meant bundled telephone/broadband offers could get supp01t while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and 1 have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundair..ental reforms are needed. The statute directs that universal service Page 2-The Honorable John Gararnendi support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, v, Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Sam Graves U.S. House of Representatives I 135 Longworth House Office Building Washington, D.C. 20515 Dear Congressman Graves: October 24, 2017 Thank you for your letter regarding the impo1tance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Sam Graves support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRM A N The Honorable Morgan Griffith U.S. House of Representatives 2202 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Griffith: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if conswners could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Retum Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Morgan Griffith support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, v. Ajit V . Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFF ICE OF THE C H AIRMAN The Honorable Vicky Hartzler U.S . House of Representatives 2235 Rayburn House Office Building Washington, D.C. 20515 Dear Congresswoman Hartzler: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head 01i. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get supp01i while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Vicky Hartzler support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, v. Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFF ICE OF THE CH AI R MAN The Honorable Lynn Jenkins U.S. House of Representatives 1526 Longworth House Office Building Washington, D.C. 20515 Dear Congresswoman Jenkins: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rnral America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers rnuld not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate··of-retum system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Lynn Jenkins support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the cunent budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, u -~ V· ~~ d AjitV. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Ron Kind U.S. House of Representatives 1502 Longworth House Office Building Washington, D.C. 20515 Dear Congressman Kind: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rurai America head on. The problem back then was that the Universal Service Fund predicated supp01i on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is Ullfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fhndamental reforms are needed. The statute directs that universal service Page 2-The Honorable Ron Kind support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, Ajit V . Pai FEDERAL COMMUNICATIONS COMMISSION WA S HINGTON OFFICE OF T HE C H A I RMAN The Honorable Steve King U.S. House of Representatives 2210 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman King: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get supp01i while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn1t exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Steve King support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, ~- ~it~~i ~~ FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OF FI CE O F T H E C H A I RMAN The Honorable Adam Kinzinger U.S. House of Representatives 2245 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Kinzinger: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get suppo1i while standalone broadband could not. The perverse result was th~t carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incenti\1e to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, caiTiers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called purn;h list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Adam Kinzinger support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the cmTent budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, v. Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFIC E OF THE CHA I RMAN The Honorable Dave Loebsack U.S. House of Representatives 1527 Longworth House Office Building \.Vashington, D.C. 20515 Dear Congressman Loebsack: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas . Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rurai America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn1t exist for some rural telephone companies - not because consumers didn1t want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Retum Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called ptinch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Dave Loebsack support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, v. Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Roger Marshall U.S. House of Representatives 312 Cannon House Office Building Washington, D.C. 20515 Dear Congressman Marshall: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite wharwas framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Retum Order - which I did not support - has not had its intended effect. I repeatedly hear from small caniers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental refonns are needed. The statu1:e directs that universal service Page 2-The Honorable Roger Marshall support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, V· Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Markwayne Mullin U.S. House of Representatives 1113 Longworth House Office Building Washington, D.C. 20515 Dear Congressman Mullin: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Markwayne Mullin support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, V· Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF T HE CHAIRMAN The Honorable Kristi Noem U.S. House of Representatives 2457 Rayburn House Office Building Washington, D.C. 20515 Dear Congresswoman Noem: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but becaus·e our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alo.ne broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental refo~s are needed. The statute directs that universal service Page 2-The Honorable Kristi Noem support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of suppo1i to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, vt V· Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHA I RMAN The Honorable Rick Nolan U.S. House of Representatives 2366 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Nolan: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service., This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Rick Nolan support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, .,,,. v . Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Steve Pearce U.S. House of Representatives 2432 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Pearce: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn1t exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Retum Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not ,have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2--The Honorable Steve Pearce support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, V· Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHING T ON OFF IC E OF T HE CHA I RMAN The Honorable Collin C. Peterson U.S. House of Representatives 2204 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Peterson: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopt~ng "significant reforms," the Commission's 2016 Rate-of­ Return Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead .to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Collin C. Peterson support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, v, AjitV. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Chellie Pingree U.S. House of Representatives 2162 Rayburn House Office Building Washington, D.C. 20515 Dear Congresswoman Pingree: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Retum Order - which I did not support-has not had its intended effect. I repeatedly hear from small carriers that offering stand-afone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Chellie Pingree support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, v. ~~· I Ajit V. Pai ' FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHA I RMAN The Honorable Mark Paean U.S. House of Representatives 1421 Longworth House Office Building Washington, D.C. 20515 Dear Congressman Paean: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC .staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service.' This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Retum Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my di~sent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Mark Pocan support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return caITiers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, v. Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFF ICE OF THE CHA I RMAN The Honorable Jared Polis U.S. House of Representatives 1727 Longworth House Office Building Washington, D.C. 20515 Dear Congressman Polis: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans- including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not"have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Jared Polis support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the unce1iainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of suppo1i to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, v. Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFF I CE OF THE CHAIRMAN The Honorable Harold Rogers U.S . House of Representatives 2406 Rayburn House Office Building Washington, D.C. 20515 · Dear Congressman Rogers: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Harold Rogers support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Todd Rokita U.S. House of Representatives 2439 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Rokita: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Todd Rokita support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know ifl can be of any further assistance. Sincerely, v. Ajit V. Pai FEDERAL COMMUN ICATIONS COMMISSION WASHINGTON OF F I CE OF THE CHA I RMAN The Honorable Steve Russell U.S. House of Representatives 128 Cannon House Office Building Washington, D.C. 20515 Dear Congressman Russell: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Steve Russell support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. l appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Austin Scott U.S. House of Representatives 2417 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Scott: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service., This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission1s 2016 Rate-of­ Return Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for ,bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Austin Scott support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncert,ainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, - v, Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHA I RMAN The Honorable Jim Sensenbrenner U.S. House of Representatives 2449 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Sensenbrenner: October 24, 2017 Thank you for your letter r~garding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same 'digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadbanµ could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order- which I did not support -has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not .have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Jim Sensenbrenner support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. ~ _ Sincerely, U -vt V· 0 Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN The Honorable Lamar Smith U.S. House of Representatives 2409 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Smith: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans- including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn1t exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order - which I did not support - has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead ~o greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Lamar Smith support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. - For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, v. Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHA I RMAN The Honorable Scott Tipton U.S. House of Representatives 218 Cannon House Office Building Washington, D.C. 20515 Dear Congressman Tipton: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't e:x:ist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order - which I did not support-has not had its intended effect. I repeatedly hear from small carriers that offering stand-afone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Scott Tipton support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, - V· Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF TH E C H AIRMAN The Honorable Nydia M. Velazquez U.S. House of Representatives 2302 Rayburn House Office Building Washington, D.C. 20515 Dear Congresswoman Velazquez: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC ·staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service.' This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order -which I did not support -has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my di~sent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from th'e 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Nydia M. Velazquez support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFF I CE OF T HE C H AIRMAN The Honorable Peter Welch U.S. House of Representatives 2303 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Welch: October 24, 2017 Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. Your views are very important and will be entered into the record of the proceeding. In my first remarks to FCC staff as Chairman earlier this year, I declared that my highest priority would be making sure every American who wants high-speed Internet access can get it. Rural Americans deserve the same digital access as those living in more urban areas. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers had an incentive to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies - not because consumers didn't want it, but because our arcane rules penalized companies for offering it. ; I wish I could tell you that the FCC has fixed this problem, but we have not. Despite what was framed as an order adopting "significant reforms," the Commission's 2016 Rate-of­ Return Order- which I did not support-has not had its intended effect. I repeatedly hear from small carriers that offering stand-alone broadband would put them underwater, that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but l!msurprising. As I said at the time, the Order complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural, America. Nor, as I predicted in my dissent to that Order, have we given carriers "sufficient incentive to be prudent and efficient in their expenditures." Due to the complexity of the budget control mechanism, carriers do not 'have the certainty they need to make the long-term investment decisions that will lead to greater connectivity. It has become clear, as my colleagues and I have worked our way through the so-called punch list of lingering issues from the 2016 Order, that more fundamental reforms are needed. The statute directs that universal service Page 2-The Honorable Peter Welch support be specific, predictable, and sufficient. Yet today I worry we are not achieving that objective for many legacy rate-of-return carriers. For those carriers that continue to receive support from the legacy rate-of-return system, I am committed to exploring how this situation can be changed and to determine the appropriate budget levels. The Commission should address the uncertainty caused by the current budget control mechanism - such as guaranteeing at least some minimum level of support to ease the unpredictability and allow reasonable capital planning - while being mindful of mitigating incentives to operate inefficiently. I appreciate your interest in this matter. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai