FCC Eases Budget Restrictions for Rural Rate-of-Return Carriers Receiving High-Cost Universal Service Support

The Federal Communications Commission temporarily waives, on its own motion, the application of the budget control mechanism for rate-of-return carriers that receive high-cost universal service support from legacy mechanisms. The FCC adopts instead a full waiver of the budget constraint for the July 2022 to June 2023 tariff year. The budget control mechanism is designed to essentially put a cap on the high-cost loop support (HCLS) and Connect America Fund broadband loop support (CAF-BLS) rural carriers receive annually, Telecompetitor reports. It caps the fund at the previous year’s level plus an inflation factor. These support funds help cover the cost of delivering telecom and broadband services to high cost rural areas, helping achieve universal service. The FCC finds that a waiver is in the public interest given the substantial reduction in support that would result from the imposition of the budget constraint, as well as the unique and continued cash flow and other economic challenges carriers face as a result of the pandemic.