In a recent letter to Arkansas lawmakers, FCC Chairman Ajit Pai had encouraging words about the future of rate floors for small LECs serving rural America. Prompted by a letter from the state’s two Republican U.S. Senators and four Republican Congressmen, Pai recognized the problems that rate floors create in the many rural and small-town areas of our country. (The Commission, as you know, has already recognized the issue by freezing the rate floor at $18.00 per month in May, 2017.)
In a letter to the Chairman, these six legislators from The Natural State rightfully pointed out that “in many areas where there may be tens of thousands or even millions of customers within a local calling area, many urban customers are paying less for basic telephone service than the rural consumer who can call perhaps only a few thousand customers locally.” They correctly stated that “Multiple stakeholders have raised concerns with respect to this policy’s implications for the affordability of basic services and the statutory mission of universal Service.”
Pai’s responding letter was strong and clear, stating forcefully that rate floors appear “to impose high costs on rural consumers without any corresponding federal benefit.” Agreeing with the Arkansas contingent’s letter, he said that “The problem is the rate floor now forces many rural customers to pay higher rates than some of their urban counterparts, including those in Washington, D.C.” The rate floor, he stated, “has made basic voice service less affordable in some rural areas, limited consumer choice, and slowed broadband deployment.”
The Chairman concluded that “Commission staff are now carefully reviewing the record, and I plan for the Commission to take action to protect rural Americans from unjustified government-mandated rate increases in the coming months.”
Welcome words, indeed.
