FCC Commissioner Pai Announces Proposal to Reform the Universal Service Fund for Rural Providers

Pete CodellaBroadband


“Rural residents have waited long enough,” says Commissioner Ajit Pai of the Federal Communications Commission. In a statement made on June 29, Pai announced his plan to support broadband deployment in rural America.

In it, he highlighted the issues he sees with the Universal Service Fund which the FCC committed to change four years ago, as well as his broader stance that a “broad, bipartisan coalition is right” for the task.

Commissioner Pai, who has been with the FCC since May of 2012, based his statement on the belief that “those living in rural America need high-speed broadband in order to compete in the digital economy.” The plan to support broadband in these areas of the United States includes changes to the way in which rural residents receive Internet service. The current provision requires that service providers install telephone capabilities along with broadband. Commissioner Pai concluded that this rule places too much constraint on small providers which cannot afford to install telephone and thus eliminates them from competing with larger telecommunications companies.

Commissioner Pai suggested that eliminating this requirement would have a big impact by giving “rural consumers the real option of choosing whether they want to purchase broadband and telephone service from the same company.” Another change that he recommends is redirecting funding to stand-alone broadband costs instead of being solely allocated to those providers who can install telephone services. Commissioner Pai said that this “would give carriers more assurance that arbitrary loopholes won’t prevent them from meeting consumer demand.”

A second set of changes that Commissioner Pai suggests would be to make participating in the Connect America Fund for rate-of-return carriers much easier. He said that participation “should be voluntary, the cost model should last for 10 years, support should target unserved locations that will meet the 10/1 benchmark, and that FCC Form 477 data can form the basis of a streamlined challenge process.”  Commissioner Pai said that success in these measures would hinge on fiscal responsibility and prioritized participation for the rural areas with the “lowest build out of high-speed broadband.”

While Commissioner Pai has gathered support from more than 60 legislators, no further statements on his plans have been made by the FCC.

Click here to read Commissioner Pai’s full statement.

Click here to read the official rule change proposal.

View residential broadband speeds on the Utah Broadband Map.