FCC's Pai Pans USF Cuts to Small Carriers

FCC Chairman Ajit Pai says that cuts in the Universal Service Fund via a mechanism instituted under the previous administration hurts small carriers and widens the rural digital divide and is evidence his USF reforms need to be finalized.

That came in a statement Tuesday (May 1) on the news that the Universal Service Administrative Company, which administers the government telecom subsidy program, wil be cutting support to small, rural carriers by over 15% this year.

FCC Chairman Ajit Pai says legacy USF budget mechanism hurts rural carriers

FCC Chairman Ajit Pai says legacy USF budget mechanism hurts rural carriers

Pai said that the mechanism, which he has proposed reforming to provide more certainty to carriers, has "created constant uncertainty for small, rural carriers, endangering their ability to make long-term investment decisions to bring high-speed broadband to the millions of Americans who still lack it."

The FCC allocated $180 million earlier this year as a stop-gap to avert budget cuts this year, but even steeper cuts are coming, he says.

"That highlights the importance of the Notice of Proposed Rulemaking we advanced earlier this year," he said. "In the Notice we take a hard look at the budget control mechanism and potential reforms to our rules to give small carriers greater investment certainty and to create incentives for more efficient operations. "

The comment period is still open on that notice, he pointed out, but when it has closed, he urged his colleagues to support final approval.

That notice, released March 23, would create a budget, the FCC said, that "will allow for robust broadband deployment in rate-of-return areas while minimizing the burden that contributions to the Universal Service Fund (the Fund) place on ratepayers and to bring greater certainty and stability to rate-of-return high-cost funding, both in the near term and in the future."

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.