OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Tammy Baldwin
United States Senate
717 Hart Senate Office Building
Washington, D.C. 20510
Dear Senator Baldwin:
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 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 compliciited 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Tammy Baldwin
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.
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable John Barrasso
United States Senate
307 Dirksen Senate Office Building
Washington, D.C. 20510
Dear Senator Barrasso:
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, hut 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 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. The statute directs that universal
service 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 in the near term 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
Sincerely,
cJ
AjitV. Pai
Page 2-The Honorable John Barrasso
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.
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Michael Bennet
United States Senate
261 Russell Senate Office Building
Washington, D.C. 20510
Dear Senator Bennet:
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 has not had its intended effect. I repeatedly hear from small carriers that offering
standalone 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, calTiers do not have the certainty they need to make the long-term
investment decisions that will lead to greater connectivity. The statute directs that universal
service support be pecific, 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 in the near term 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
Page 2-The Honorable Michael Bennet
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. Pal
I
J
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Roy Blunt
United States Senate
260 Russell Senate Office Building
Washington, D.C. 20510
Dear Senator Blunt:
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 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. The statute directs that universal
service 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 in the near term 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
Page 2--The Honorable Roy Blunt
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
qAiTss\0
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable John Boozman
United States Senate
141 Hart Senate Office Building
Washington, D.C. 20510
Dear Senator Boozman:
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 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable John Boozman
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.
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Maria Cantwell
United States Senate
511 Hart Senate Office Building
Washington, D.C. 20510
Dear Senator Cantwell:
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 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. The statute directs that universal
service 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 in the near term how this situation can he 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
Page 2-The Honorable Maria Cantwell
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
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Shelley Moore Capito
United States Senate
172 Russell Senate Office Building
Washington, D.C. 20510
Dear Senator Capito:
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 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 systeni 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Shelley Moore Capito
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,
AjitV.Pai
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Bill Cassidy
United States Senate
703 Hart Senate Office Building
Washington, D.C. 20510
Dear Senator Cassidy:
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 affbrd 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-
Re turn Order 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Bill Cassidy
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.
Ajit V. Pai
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Susan Collins
United States Senate
413 Dirksen Senate Office Building
Washington, D.C. 20510
Dear Senator Collins:
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 Conm-iission 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 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Susan Collins
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
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable John Cornyn
United States Senate
517 Hart Senate Office Building
Washington, D.C. 20510
Dear Senator Cornyn:
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-
Re turn Order 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. The statute directs that universal
service 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 in the near term 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
Page 2--The Honorable John Cornyn
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
(I 2
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Catherine Cortez Masto
United States Senate
B4OA Dirksen Senate Office Building
Washington, D.C. 20510
Dear Senator Cortez Masto:
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 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 unitbrtunate 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Catherine Cortez Masto
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
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Tom Cotton
United States Senate
124 Russell Senate Office Building
Washington, D.C. 20510
Dear Senator Cotton:
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-
Re turn Order 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Tom Cotton
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,
AjitV.PaiI
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Michael D. Crapo
United States Senate
239 Dirksen Senate Office Building
Washington, D.C. 20510
Dear Senator Crapo:
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 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Michael D. Crapo
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
£
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Steve Dames
United States Senate
320 Hart Senate Office Building
Washington, D.C. 20510
Dear Senator Dames:
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 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Steve Dames
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.
AjitV.Pai
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Tammy Duckworth
Uni.ted States Senate
G12 Dirksen Senate Office Building
Washington, D.C. 20510
Dear Senator Duckworth:
Thank you for your letter regard.ing 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 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Tammy Duckworth
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.
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Richard J. Durbin
United States Senate
711 Hart Senate Office Building
Washington, D.C. 20510
Dear Senator Durbin:
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
Re turn Order 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Richard J. Durbin
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.
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Al Franken
United States Senate
309 Hart Senate Office Building
Washington, D.C. 20510
Dear Senator Franken:
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 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Al Franken
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,
O.(
	
AjitV.Pai
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Cory Gardner
United States Senate
354 Russell Senate Office Building
Washington, D.C. 20510
Dear Senator Gardner:
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 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Cory Gardner
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
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6,2017
The Honorable Kirsten Gillibrand
United States Senate
478 Russell Senate Office Building
Washington, D.C. 20510
Dear Senator Gillibrand:
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 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Kirsten Gillibrand
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.
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Charles E. Grassley
United States Senate
135 Hart Senate Office Building
Washington, D.C. 20510
Dear Senator Grassley:
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 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. The statute directs that universal
service support be specific, predictable, and sufficient. Yet today I worry we are not achieving
that objective for many legacy i ate-of-return carriers.
For those carriers that continue to receive support from the legacy rate-of-return system, I
am committed to exploring in the near term 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
Page 2-The Honorable Charles E. Grassley
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
iüiis'
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Maggie Hassan
United States Senate
B85 Russell Senate Office Building
Washington, D.C. 20510
Dear Senator Hassan:
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 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Maggie Hassan
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.
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Heidi Heitkamp
United States Senate
110 Hart Senate Office Building
Washington, D.C. 20510
Dear Senator Heitkamp:
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 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 fhr 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. The statute directs that universal
service 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 in the near term 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
Page 2--The Honorable Heidi Heitkamp
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
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable John Hoeven
United States Senate
338 Russell Senate Office Building
Washington, D.C. 20510
Dear Senator Hoeven:
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-
Re turn Order 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Jolm Hoeven
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,
AjitV.Pai
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Johnny Isakson
United States Senate
131 Russell Senate Office Building
Washington, D.C. 20510
Dear Senator Isakson:
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 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Johnny Isakson
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,
11
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Ron Johnson
United States Senate
328 Hart Senate Office Building
Washington, D.C. 20510
Dear Senator Johnson:
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 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. The statute directs that universal
service support be specific, predictabEe, and sufficient. Yet today I worry we are no 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 in the near term 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
Page 2-The Honorable Ron Johnson
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,
aA
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Angus King
United States Senate
133 Hart Senate Office Building
Washington, D.C. 20510
Dear Senator King:
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 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Angus King
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
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Amy Kiobuchar
United States Senate
302 Hart Senate Office Building
Washington, D.C. 20510
Dear Senator Kiobuchar:
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 riot 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 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Amy Kiobuchar
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
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable James Lankford
United States Senate
316 Hart Senate Office Building
Washington, D.C. 20510
Dear Senator Lankferd:
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-oJ
Return Order 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. The statute directs that universal
service support be specific. pedictable, 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, 1
am committed to exploring in the near term 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
Page 2-The Honorable James Lankford
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.
aA
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Joe Manchin
United States Senate
306 Hart Senate Office Building
Washington, D.C. 20510
Dear Senator Manchin:
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 aftbrd 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 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 bunched 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Joe Manchin
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
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Jerry Moran
United States Senate
521 Dirksen Senate Office Building
Washington, D.C. 20510
Dear Senator Moran:
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 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Jerry Moran
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,
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Patty Murray
United States Senate
154 Russell Senate Office Building
Washington, D.C. 20510
Dear Senator Murray:
Thank you for your letter regarding the importance of delivering affordable access to
high-speed Internet to all Arnericans--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 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Patty Murray
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,
1)
I I
	
-LF
0
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Jim Risch
United States Senate
483 Russell Senate Office Building
Washington, D.C. 20510
Dear Senator Risch:
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 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Jim Risch
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
December 6, 2017
The Honorable Pat Roberts
United States Senate
109 Hart Senate Office Building
Washington, D.C. 20510
Dear Senator Roberts:
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 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. The statute directs that universal
service support be specific, predictable, and sufficient. Yet today I wony 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 in the near term 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
Page 2-The Honorable Pat Roberts
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,
(J
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Michael Rounds
United States Senate
502 Hart Senate Office Building
Washington, D.C. 20510
Dear Senator Rounds:
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 has not had its intended effect. 1 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Michael Rounds
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,
AjitV. Pai
aA
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASH! N GTON
December 6, 2017
The Honorable Tim Scott
United States Senate
520 Hart Senate Office Building
Washington, D.C. 20510
Dear Senator Scott:
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 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Tim Scott
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.
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Jeanne Shaheen
United States Senate
506 Hart Senate Office Building
Washington, D.C. 20510
Dear Senator Shaheen:
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 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Jeanne Shaheen
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
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Luther Strange
United States Senate
326 Russell Senate Office Building
Washington, D.C. 20510
Dear Senator Strange:
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 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. The statute directs that universal
service 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 in the near term 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
Page 2--The Honorable Luther Strange
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.
Ajit V. Pal
/1
Sincerely,
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6,2017
The Honorable Jon Tester
United States Senate
311 Hart Senate Office Building
Washington, D.C. 20510
Dear Senator Tester:
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 livlng 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 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Jon Tester
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.
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
December 6, 2017
The Honorable Thom Tillis
United States Senate
185 Dirksen Senate Office Building
Washington, D.C. 20510
Dear Senator Tillis:
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 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. The statute directs that universal
service 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 in the near term 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
Page 2-The Honorable Thom Tillis
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.
'(I