Recent FCC actions indicate that it is in the process of addressing the critical shortfall in USF support for RLECs.
The Commission has directed USAC to retain any excess cash in the high cost account at year end 2017, estimated at $129 million, and not take that amount into consideration in calculating the first quarter 2018 contribution factor. While this is intended simply to stabilize that factor, it could also be a first step in using huge, unallocated USF reserves to cover current RLEC high cost revenue shortages.
Additionally, Chairman Pai sent letters to several members of Congress, responding to their concerns over delivering affordable internet access to all Americans, including those in high cost rural areas. He recognized that fundamental changes are needed in the 2016 Rate of Return Reform Order, and affirmed his commitment to determine proper future budget levels for legacy R-o-R carriers.
In his letter, he also advocated that the FCC address the current budget control mechanism, and guarantee at least some minimum level of support to ease unpredictability and allow reasonable capital planning. In a second Congressional letter, Pai pointed to an earlier draft order – not yet passed — that would let tribal RLECs recover more operating expenses than current rules allow.
With NTCA leading the charge, it appears that the Commission is now giving serious attention to solving the continuing RLEC problem of shortfalls in high cost support.