Julie Veach

The Federal Communications Commission’s unanimous, bipartisan reforms of universal service in November 2011 included changes to make the system fairer for all consumers.

Among these changes was the phase-out of excessive subsidies for basic phone service, which allowed some phone companies to charge their customers as little as $5 a month at a time when the average suburban or urban customer was paying $16. The reforms have been gradually eliminating these excessive subsidies to level the playing field for all consumers and contain the cost of the program, which is funded by universal service fees ultimately paid by consumers.

As we approach the third step of this phase-in, we are seeking comment on providing additional time to allow all interested parties to adjust. We look forward to public comment on this question as we work to make universal service fair for all consumers and businesses.

Commissioner Ajit Pai said: “Today the FCC announces a new ‘rate floor’ of $20.46 a month. What does that mean? Over a million customers in rural areas will face a rate hike of up to 46 percent in the next few months. This is bad news in tough times. Why should the FCC saddle rural Americans with rate increases when doing so may not save the Universal Service Fund a dime and may in fact divert scarce funds away from broadband deployment? And why should the FCC override state-set rates to raise costs for consumers?”
Right now, the economy is good for many people here in Washington, DC. But a recovery hasn’t
yet reached much of rural America. Let’s not add to the challenges our fellow citizens face by increasing
their phone bills. Instead, let’s freeze the rate floor indefinitely and reexamine this misguided policy.

Delivering on the announcement made by Chairman Wheeler in his Digital Learning Day remarks, the Wireline Competition Bureau released a Public Notice seeking more focused comment on a set of key issues initially raised in the E-Rate Modernization notice of proposed rulemaking. The Notice seeks to strengthen the record on four important issues:

• how to best structure the program in a way that places a greater focus on connectivity inside the walls of classrooms and libraries in an equitable manner to all eligible schools and libraries; whether and how to establish a one-time deployment initiative within the structure of the existing program providing targeted additional funding for those schools and libraries who remain without access to a high-speed broadband connection;
• phasing out or reducing support for legacy voice services; and
• ideas on potential demonstration projects.

Additional focused comment on these topics will help the Commission tackle some difficult issues necessary to accomplishing the program goals laid out in the E-Rate Modernization NPRM. While we seek answers to these questions, by no means does this Notice represent the full set of issues that may be addressed in a future order. Working with E-rate supported companies, schools and libraries, we are working to better understanding current connectivity levels and pricing, as well as the potential one-time and recurring costs of paying for scalable high-speed connections to and within all schools and libraries. We have repeatedly emphasized the Commission’s commitment to data-driven decision making throughout the E-rate modernization process.

[March 7]