A Farewell to . . . Rate Floors?

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In a recent news release, FCC Chairman Ajit Pai announced that the Commission will vote on eliminating rate floors at its upcoming April meeting. These floors were frozen by the FCC in 2017 to help mitigate their harmful effect on RLECs and their customers. Now, the Chairman is advocating their total elimination.
Calling rate floors “counterproductive regulation that hurts rural Americans,” he said that “unless the Commission takes action, many rural consumers will be forced to pay almost 50% more out of their pockets starting this July. “That’s why,” he explained, “we’ve heard from the AARP, the National Consumer Law Center, the National Tribal Telecommunications Association and others that the rule makes service in rural areas less affordable.”
NTCA, a very effective advocate for RLEC issues, jumped in immediately in support of Chairman Pai’s proposal. A dramatic increase in the floor, NTCA observed, “would cause significant harm to rural consumers in the form of: (1) voice telephony rates that could increase” by a substantial amount, “and/or (2) suppressed network investment (due to rate floor-driven reductions in universal service support) that would hinder delivery of advanced voice and broadband services…”
NTCA also called for protection against harm that could be caused by the timing of any rate floor elimination order. “Specifically,” it noted, USAC “will announce the next iteration of the budget control mechanism on universal service support as of May 1. If the Commission were to reach a decision…on April 12, the possibility exists that (it) may not be published in the Federal Register before May 1.” To avoid unintended harm, it urged the Commission to waive its rate floor rules in the short term to eliminate this timing problem.
We thank NTCA for their work on behalf of RLECs and their customers. As for Chairman Pai, as the TV commercial succinctly says, “He gets it.”