Telecom Groups Urge FCC to Increase Rural Broadband Focused 2018 USF Budget to At Least $2.4B

Four telecommunication groups have come together to urge the Federal Communications Commission to increase the Universal Service Fund (USF) budget to at least $2.4 billion for 2018 for the high-cost portion of the program. The request took the form of a letter from ITTA – The Voice of America’s Broadband Providers, USTelecom – The Broadband Association, NTCA – The Rural Broadband Association and WTA – Advocates for Rural Broadband. Small rural telecom companies that receive USF support had the option in 2016 of moving to a cost-based support option known as the alternative Connect America model (A-CAM) or continuing to receive funding based on the traditional mechanism, which bases support on a carrier’s embedded costs. Those carriers choosing A-CAM had to commit to more aggressive broadband buildout requirements.

More carriers than anticipated chose the A-CAM model, which created a funding shortfall for both that program and the traditional program.  Since then the FCC has increased budgets for the programs but not enough to cover the entire shortfall, which means the commission has had to reduce broadband buildout targets commensurately. According to the letter sent to the FCC Oct 1, “[o]ngoing uncertainty over universal service funding is deterring investment, harming rural consumers and businesses and undermining the commission’s goals of universal service and closing the digital divide.” Increasing the high-cost Universal Service Fund budget to $2.4 billion annually would enable A-CAM funding recipients to receive support at the level initially offered to them in 2016, the letter says.