FCC Commissioner Pai Pans Overcomplicated USF Reform Plans

Federal Communications Commissioner Ajit Pai said he is not confident the FCC can keep its pledge to Congress to deal with the issue of subsidizing stand-alone rural broadband by the end of 2015.

Currently, the FCC's Universal Service Fund subsidizes traditional telephone service in rural areas, but not broadband-only service, which works against its goal of transitioning phone subsidies to broadband more broadly.

In a speech to an NTCA – The Rural Broadband Association policy conference in Washington, Commissioner Pai said that "[t]hrough a quirk of regulatory history, our rules governing small, rural carriers continue to provide universal service support only to networks that supply telephone service, not stand-alone broadband service. That regulatory system has increasingly come under strain as consumers flee landlines in favor of wireless and Internet-based (or 'over-the-top') alternatives." He said rural carriers are not investing for fear they can't migrate to deploying the next generation services their customers want or they will lose the Universal Service funding they need.