FCC Approves Universal Service Order Promoting Rural Broadband Deployment

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By Tim McElgunn

March 30 — The Federal Communications Commission has unanimously approved changes to the universal service program that it says will allow rural telecommunications providers to deliver broadband services to the approximately 20 percent of homes that still lack access to wireline broadband.

The agency's order, issued March 30, will provide approximately $20 million in support to “rate-of-return” service providers.

Those operators will have a choice in how they access the subsidies. Under the Connect America Fund Broadband Loop support, operators can shift existing Interstate Common Line support they now use to support voice service to provide support for stand-alone broadband instead. Alternately, carriers can choose to transition from legacy rate-of-return support to model-based support, similar to Connect America Fund Phase II support made available to larger carriers last year.

In either case, carriers will have to deploy broadband facilities capable of delivering a minimum of 10 megabits per second (Mbps) downstream and 1 Mbps upstream. In some areas with higher population density, the minimum speeds will be set at 25 Mbps and 3 Mbps.

Rate-of-return carriers will see subsidies decrease from 11.25 percent to 9.75 percent, The FCC says that the decrease, which is based on “current market conditions” will be phased in over time.

“We are pleased that the FCC has released an order adopting universal service reforms for rural carriers that provides support for broadband in addition to voice lines,” USTelecom President Walter McCormick said in a statement. “This is a major step to modernizing an aging program, and we congratulate the commission on achieving it. We look forward to continuing the collaborative process that we and other associations engaged in with the commission as we work to implement this plan.” The FCC is seeking comment on further reforms to bar carriers from billing for inappropriate expenses, such as artwork and corporate jets. The agency also is seeking comment on measures to increase broadband deployment on tribal lands.

To contact the reporter on this story: Tim McElgunn in Cherry Hill, NJ at tmcelgunn@bna.com To contact the editor responsible for this story: Keith Perine at kperine@bna.com

For More Information

The commission's news release on the item is available at https://www.fcc.gov/document/fcc-reforms-high-cost-program-rate-return-carriers