Recipients of High Cost Loop (“HCL”) Support rejoice! Yesterday, the FCC stopped the federally mandated policy widely known as the local “rate floor”. Under this policy, rural rate of return carriers are required to charge a minimum of $18.00 per line per month to maintain full eligibility for HCL. If a carrier is $1.00 per line below this level, it loses $1.00 per line of federal HCL. Absent this action, the rate floor was set to increase to $20.00 per line on July 1st. Chairman Pai noted the flaw in this rule by pointing out that the average rate for basic phone service in Washington DC was $13.78 in 2016. 

Commissioner O’Rielly agreed with the proposal, but indicated reluctance to “subsidize everyone who lives in a particular area no matter their income”. O’Rielly joined Commissioner Clyburn in drafting a Notice of Proposed Rulemaking (“NPRM”) to further advance USF reform. While the NPRM is not yet available, the Commission seems intent on addressing corporate expenses, means testing, and the ever popular “waste, fraud, and abuse” sound bite.

When the NPRM is published, we’ll make it available on our website. Should you have any questions email Gary.