FCC rural broadband funding could increase by over $500 million if the commission votes to adopt an order circulated by commission chairman Ajit Pai. According to an FCC spokesman, the funding would include about $180 million for the current funding year for the nation’s smaller rate-of-return (ROR) carriers who get their support through traditional legacy mechanisms and up to $360 million over the next 10 years to ROR carriers who receive support based on the A-CAM cost model.
In a statement Pai said he had heard “from community leaders, Congress and carriers that insufficient, unpredictable funding” has kept them from deploying broadband more extensively to close the digital divide. The funding, he said, will “boost broadband deployment in rural America and put our high-cost system on a more efficient path, helping to ensure that every American can benefit from the digital revolution.”
The $500 million would come, in part, from reserves, the spokesman said. In addition, the order seeks comment on the Universal Service Fund (USF) budget, he noted.
A press release also notes that the order “would put in place strong new rules to prevent abuse of the high-cost program” and proposes several reforms to the high-cost program aimed at improving its efficiency and effectiveness.
FCC Rural Broadband Funding
Carriers should welcome the potential increase in FCC rural broadband funding, especially considering that the commission has lacked sufficient budget to achieve all the broadband goals that it previously established. In 2016, more carriers than anticipated opted to participate in the A-CAM program, creating funding shortages in both the A-CAM and traditional USF high-cost programs.
The commission made some additional funding available for A-CAM carriers but not enough to cover the shortage, which meant deployment goals and funding had to be scaled back for both programs. Although today’s press release did not provide details, the dollar figures provided by the commission spokesman suggest the commission may be able to make up at least some of the remaining budget shortages. NTCA – The Rural Broadband Association representing ROR carriers has estimated the annual budget shortfall for the two types of high-cost USF funding at about $200 million.
The news about a potential increase in FCC rural broadband funding comes just over week after President Trump talked about the importance of broadband to the rural economy in an address at American Farm Bureau Federation convention but did not include broadband when he discussed various types of infrastructure that would receive “necessary” funding.
In a press release, Shirley Bloomfield, NTCA chief executive officer, called Pai’s proposal “an important, long-needed step to put the USF programs back on track toward achievement of the statutory goals of universal service.”
USTelecom CEO Jonathan Spalter also praised Pai’s action, calling the draft order an “important marker” to closing the digital divide. “Direct federal funding is a critical component to upgrading and expanding networks so every American has access to benefits of high-speed internet, no matter where they live,” Spalter added.