OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Doug LaMalfa U.S. House of Representatives 322 Cannon House Office Building Washington, D.C. 20515 Dear Congressman LaMalfa: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Doug LaMalfa imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Doug Lamborn U.S. House of Representatives 2402 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Lamborn: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Doug Lamborn imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Bob Latta U.S. House of Representatives 2448 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Latta: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Bob Latta imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Sincerely, IC Ajit V. Pai OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Dave Loebsack U.S. House of Representatives 1527 Longworth House Office Building Washington, D.C. 20515 Dear Congressman Loebsack: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Dave Loebsack imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Sincerely, Li-k V AjitV.Pai OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6,2017 The Honorable Mia Love U.S. House of Representatives 217 Cannon House Office Building Washington, D.C. 20515 Dear Congresswoman Love: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Mia Love imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Sincerely, vi Ajit V. Pal ckA 1 I? OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Frank D. Lucas U.S. House of Representatives 2405 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Lucas: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Frank D. Lucas imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Sincerely, (j AjitV.Pai 7COMM A1MISS\9I OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Blame Luetkemeyer U.S. House of Representatives 2230 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Luetkemeyer: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Blame Luetkemeyer imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Roger Marshall U.S. House of Representatives 312 Cannon House Office Building Washington, D.C. 20515 Dear Congressman Marshall: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Roger Marshall imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Michael McCaul U.S. House of Representatives 2001 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman McCaul: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Michael McCaul imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6,2017 The Honorable Jim McGovern U.S. House of Representatives 438 Cannon House Office Building Washington, D.C. 20515 Dear Congressman McGovern: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Jim McGovern imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Sincerely, Ajit V. k'ai OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS CoMMISSIoN WASHINGTON July 6, 2017 The Honorable David B. McKinley U.S. House of Representatives 2239 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman McKinley: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable David B. McKinley imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Ajit V. Pai OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Luke Messer U.S. House of Representatives 1230 Longworth House Office Building Washington, D.C. 20515 Dear Congressman Messer: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Luke Messer imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai OFFICE OF THE CHAiRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6,2017 The Honorable Markwayne Mullin U.S. House of Representatives 1113 Longworth House Office Building Washington, D.C. 20515 Dear Congressman Mullin: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Markwayne Mullin imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Kristi Noem U.S. House of Representatives 2457 Rayburn House Office Building Washington, D.C. 20515 Dear Congresswoman Noem: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Kristi Noem imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Rick Nolan U.S. House of Representatives 2366 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Nolan: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Rick Nolan imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Sincerely, , vs Ajit V. Pai OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6,2017 The Honorable Tom O'Halleran U.S. House of Representatives 126 Cannon House Office Building Washington, D.C. 20515 Dear Congressman O'Halleran: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2---The Honorable Tom O'Halleran imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we caimot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Sincerely, aA Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON fMIS5 OFFICE OF THE CHAIRMAN July 6, 2017 The Honorable Pete Olson U.S. House of Representatives 2133 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Olson: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Pete Olson imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. AjitV. Pai OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Steve Pearce U.S. House of Representatives 2432 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Pearce: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Steve Pearce imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we caimot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Ed Perlmutter U.S. House of Representatives 1410 Longworth House Office Building Washington, D.C. 20515 Dear Congressman Perlmutter: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish T could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Ed Perimutter imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai cJ OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6,2017 The Honorable Collin C. Peterson U.S. House of Representatives 2204 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Peterson: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Collin C. Peterson imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Chellie Pingree U.S. House of Representatives 2162 Rayburn House Office Building Washington, D.C. 20515 Dear Congresswoman Pingree: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Chellie Pingree imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Mark Pocan U.S. House of Representatives 1421 Longworth House Office Building Washington, D.C. 20515 Dear Congressman Pocan: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Mark Pocan imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Sincerely, vi Ajit V. Pal OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Bruce Poliquin U.S. House of Representatives 1208 Longworth House Office Building Washington, D.C. 20515 Dear Congressman Poliquin: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Bruce Poliquin imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Sincerely, Ajit V. Pai 1 OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Jared Polis U.S. House of Representatives 1727 Longworth House Office Building Washington, D.C. 20515 Dear Congressman Polis: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Jared Polls imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Sincerely, 0 OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Jamie Raskin U.S. House of Representatives 431 Cannon House Office Building Washington, D.C. 20515 Dear Congresswoman Raskin: Thank you for your letter regarding the importance of delivering affordable access to high-speed Internet to all Americans-including those in high-cost rural areas. As you know, I grew up in Parsons, Kansas and during my time at the Commission have traveled to locations ranging from Barrow, Alaska to Laurens, Iowa, and Carthage, Mississippi. Through these experiences and meeting with countless Americans and carriers across the country, I have seen what access to affordable high-speed Internet access can do for a community-for its schools, its libraries, and its hospitals and for those Americans struggling to stay afloat. Four years ago, I called on the Commission to tackle the issue of affordable broadband in rural America head on. The problem back then was that the Universal Service Fund predicated support on providing voice service. This meant bundled telephone/broadband offers could get support while standalone broadband could not. The perverse result was that carriers were incented to take universal service support and offer telephone/broadband bundles (even if consumers could not afford them) while not offering standalone broadband. The business case for stand-alone broadband didn't exist for some rural telephone companies-not because consumers didn't want it, but, as you note in your letter, because our arcane rules penalized companies for offering it. I wish I could tell you that the FCC has fixed this problem. But as your letter rightly points out, we have not. Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order-an effort that would not have happened but for the resounding call to action from Congress as expressed in the letters you mention-I still hear from small carriers that offering stand-alone broadband would put them underwater; that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. This is unfortunate but unsurprising. As I said at the time, the Order needlessly complicated our rate-of-return system and in many ways made it harder, not easier, for small providers to serve rural America. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges Page 2-The Honorable Jamie Raskin imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues. Although I hope these changes will help, you may be right that something more fundamental is needed. After all, if the Order is not carrying out its stated purpose of advancing broadband deployment in rural America, we cannot ignore that problem-for time is not on the side of rural Americans. I appreciate your views on this matter. They will be included in the record of this proceeding and considered as part of the Commission's review. Please let me know if I can be of any further assistance. Sincerely, 1 Ajit V. Pai