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Mar 03 2016

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USF Contribution Reform: The Next Step

With the FCC’s USF reform order circulating for votes at the agency, the next critical step in the process (after, of course, reading the order, digesting and taking the next steps of fighting on the necessary cleanup) is USF contribution reform. While many, including myself, would have argued that it would have been a good first step, nonetheless, it needs to get done. I was delighted to see the ex parte CoBank filed earlier this week on that very topic. Rob West, CoBank senior vice president, filed an outstanding letter, noting, “As the FCC finalizes its current deliberations on the Universal Service Fund high-cost program reforms, it is time to consider what needs to be done next to continue to support the deployment and maintenance of broadband in rural America. CoBank believes that the examination and reform of the USF’s contributions mechanism is long overdue to maintain the viability of the program.”

Touché! How encouraging it was to see a key lender in the rural telecom industry question the current and longstanding goal of a $2 billion budget cap for the high-cost program. While USF programs such as E-Rate and Lifeline have seen budgetary growth the budget for the high-cost program has not changed due to inflation or other factors, and yet communications networks have become more advanced, complex and expensive. I was also pleased to hear the topic raised at yesterday’s Senate Commerce Committee oversight hearing, and I look forward to hearing more from the federal-state joint board on when and how to take this next, responsible step, because at the end of the day, there will be no need for any sort of arbitrary and inadequate budget for the high-cost program if all consumers that use the broadband network contribute to the funding of that network. It really is logical and a win-win situation.

My thanks to CoBank for their forward-looking perspective on assuring that a sustainable cost-recovery mechanism remains in place to support the financing of rural broadband in rural America.

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