In a recent presentation to WTA, FCC Commissioner Michael O’Rielly touched on important aspects of high cost USF support for Rate-of-Return carriers. His remarks are very likely an indication of where the Commission is headed on the critical need for additional funding to high cost, rural R-o-R LECs.
The Commissioner stated that he was “generally favorable to adding some additional funding to the rate-of-return portion of the high-cost budget for both legacy and model support carriers.” He has said previously that the FCC “should closely examine our high-cost reserves, and review any assumptions, policies or directions regarding those reserves, to determine whether additional funding could come from those reserves without having a significant effect on our other obligations…”
He further pointed out that “it does appear that that some amount of reserve funding could be available. While it may not provide all relief sought by affected carriers, it could benefit consumers and carriers in areas more difficult to serve, including those areas that tend to be in rural America.”
O’Rielly also spoke of the Commission’s comprehensive review of the entire high cost budget by the end of 2017, “to ensure that funding levels were properly calibrated.” As part of this process, he has advocated firm budgets and a cap on the Lifeline program. He stated he was reluctant to broaden the base of USF contributors to include broadband users, “absent Congressional direction.”
It appears to us that some temporary, additional USF funding may be coming to RLECs – legacy and model based – from current USF reserves, and more permanent, increased future funding from revised FCC high cost budgets.
We simply hope that the FCC acts on these measures sooner, rather than later.
