FCC Modifies Letter of Credit Rules to Facilitate Broadband Buildout

The Federal Communications Commission adopted changes to rules governing letters of credit to relieve administrative and financial burdens on broadband providers receiving certain types of high-cost support from the FCC’s Universal Service Fund. Letters of credit are an important safeguard for certain high-cost programs and today’s approved changes will increase the number of banks qualified to issue letters of credit and ultimately free up capital for deployment. To receive high-cost support authorized through one of the FCC’s competitive processes, eligible telecommunications carriers must obtain and maintain a letter of credit from a qualified financial institution. This Report and Order changes the FCC’s current rules to allow U.S. banks that are well capitalized to issue letters of credit to high-cost support recipients, which will increase the number of banks qualified to issue letters of credit.