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Senators Seek Help for Rural Cord-Cutters

A bipartisan group of sixty-one senators, led by Senate Commerce Committee chairman John Thune (R-S.D.) and committee member Amy Klobuchar (D–Minn.), have written to FCC chairman Tom Wheeler to ask the FCC to get moving on migrating Universal Service Fund subsidies to broadband so rural cord-cutters aren't penalized.

"When rural customers 'cut the cord' of traditional phone service in favor of wireless or Internet-based phone services, rural communities served by smaller telecommunication providers lose access to USF support for broadband deployment even if the customer continues to pay for broadband Internet service," they said. "The outdated rules create a needless link between customers signing up for services they may not want or need and broadband deployment."

The FCC created a Connect America Fund to move subsidies from phone to broadband, but still has work to do. The senators praised that long-term goal, but said in the short term consumers should not be left in the lurch.

"[W]e are troubled that the FCC has yet to take meaningful steps to address one of the most problematic aspects of the existing USF rules," they said, pointing out that 44 senators had signed a letter in May 2014 asking for a targeted fix.

"Requests from rural consumers present a growing dilemma for rural carriers," said Sen. Roger Wicker (R-Miss.), in a separate statement. "Under current FCC rules, local exchange carriers are required to provide broadband to receive USF support, but lose USF support if their customers subscribe to that broadband service without also purchasing voice service. Unless this problem is addressed by the FCC, the current rules will increasingly lead to an unintended outcome of less choice for rural consumers when the goal of national universal service policy is to increase broadband deployment and adoption in rural areas."

The chairman has committed to action on this and other related issues by the end of this year, and did so again Tuesday in a Senate budget hearing, where he said he agreed it did not make a lot of since to continue to link narrowband and broadband subsidies.

“NTCA–The Rural Broadband Association is profoundly appreciative of Senators Thune and Klobuchar, along with more than half of their colleagues in the Senate, for their leadership in encouraging the FCC to make targeted updates as soon as possible to existing high-cost Universal Service Fund (USF) mechanisms," the group said in a statement. "This letter represents a clear and unmistakable message from Congress that it is time to make the kinds of updates that consumers need right now."

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.