Earlier this week, USAC came out with the new budget control mechanism, part of the requirement under the FCC Rate of Return Reform Order. To remain within the annual rate of return budget, USAC has to apply the FCC Budget Control Mechanism methodology to reduce the anticipated USF support for the coming year. Sigh. This is one of those pieces of the Reform Order that has flown right in the face of the cost based carriers needs for certainty and predictability that gives them the confidence to continue their rural broadband deployment plans. On one hand, we have policymakers coming out with weekly press releases and pieces of legislation on increasing broadband deployment in rural areas, and on the other hand we have this budget cutting mechanism that takes that support away before it goes out the door.
That is why I was greatly heartened by Chairman Pai’s public statement as soon as the numbers were released. I have included the Chairman’s statement below but the simple recognition that he, and hopefully the others on the commission, understand that these cuts and regulatory uncertainty fly right in the face of real deployment to real Americans is significant and we at NTCA stand ready to work with he and his colleagues to get the job done!
Federal Communications Commission Chairman Ajit Pai issued the following statement today after the Universal Service Administrative Company’s announcement that the budget control mechanism adopted in 2016 will cut universal service support for small, rural carriers by 15.52% over the course of the next year:
“The prior Administration’s budget control mechanism 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. That’s why earlier this year we allocated $180 million to such carriers as a stop-gap measure to avert budget cuts for the current funding year.
“But now small carriers are facing even more severe cuts in the coming year, which will only exacerbate the digital divide in rural America. That highlights the importance of the Notice of Proposed Rulemaking we advanced earlier this year. 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. We’re still accepting public input on the Notice, but once that period has ended, I hope my colleagues will support my efforts to take action in the coming months.”