Chairman Genachowski's Response to Members of Congress Regarding Universal Service and Intercarrier Compensation Reform

In March 2011, 35 House Republicans wrote a letter to Federal Communications Commission Chairman Julius Genachowski with concerns about the FCC's efforts to reform the universal service (USF) program and intercarrier compensation system (ICC). They had a number of questions: "could you describe how the FCC will specifically account for the impact any changes to USF and ICC may have on service providers who are also [Rural Utilities Service] borrowers? Will the FCC conduct a thorough analysis of USF and ICC changes and the potential impact of those changes on RUS borrowers' ability to repay loans? And, will you conduct such an analysis before making any changes to USF and ICC rules?"

On May 31, Chairman Genachowski replied saying that the FCC is "mindful of the fact that changes to the Universal Service Fund and intercarrier compensation system may affect providers serving rural areas that receive public funding from other governmental agencies such as the Rural Utilities Service (RUS). A reformed, broadband-focused Universal Service Fund and intercarrier compensation system should complement RUS's efforts to spur broadband build-out in rural America through public-private partnerships. To that end, the Commission has requested data from firms currently receiving RUS support to examine the potential impact of changes to the system and has been working closely with RUS to address related issues. The Commission will analyze the data we receive to detern1ine the appropriate size of future recovery mechanisms and any necessary transitions to those mechanisms."