Rural internet service providers catch a break as FCC decides not to slash Universal Service support

Rural broadband providers breathed a sigh of relief after the Federal Communications Commission announced it would waive steep cuts to Universal Service Fund (USF) support which were set to take effect in July 2022. In an order formalizing the waiver, the FCC said it determined “current circumstances pose significant burdens on legacy carriers, which would be exacerbated should there be a significant reduction in support, at a time when they are facing insufficient cash flow and increased expenses.” Commissioner Brendan Carr in a statement pointed specifically to inflation as a key source of pressure for small, rural operators. “The dollars they need to extend their networks and connect Americans are not going nearly as far today as they did a short while ago. So, today’s decision makes eminent sense,” he said. The cuts in question would have reduced the support rural operators receive from two USF programs: Connect America Fund Broadband Loop Support and High Cost Loop Support. Both are subject to a budget control mechanism implemented in 2016 which is designed to systematically lower the monthly per-line subsidy operators receive over the course of several years.