OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Martha Roby U.S. House of Representatives 442 Cannon House Office Building Washington, D.C. 20515 Dear Congresswoman Roby: 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 Martha Roby 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, OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6,2017 The Honorable Harold Rogers U.S. House of Representatives 2406 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Rogers: 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 Harold Rogers 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 Todd Rokita U.S. House of Representatives 2439 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Rokita: 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 Todd Rokita 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. fi oLd Sincerely, Ajit V. Pai OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable David Rouzer U.S. House of Representatives 424 Carmon House Office Building Washington, D.C. 20515 Dear Congressman Rouzer: 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 Rouzer 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, il -:; V AjitV. Pai OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS CoMMIssION WASHINGTON July 6,2017 The Honorable Steve Russell U.S. House of Representatives 128 Cannon House Office Building Washington, D.C. 20515 Dear Congressman Russell: 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 Russell 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, v. çcA (j AjitV.Pai OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Tim Ryan U.S. House of Representatives 1126 Longworth House Office Building Washington, D.C. 20515 Dear Congressman Ryan: 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 Tim Ryan 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 ' / OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Kurt Schrader U.S. House of Representatives 2431 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Schrader: 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 Kurt Schrader 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. y OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6,2017 The Honorable Austin Scott U.S. House of Representatives 2417 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Scott: 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 Austin Scott 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, 11 Ajit V. Pai FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN July 6, 2017 The Honorable Jim Sensenbrenner U.S. House of Representatives 2449 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Sensenbrenner: 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 Sensenbrenner 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 ckA n '1' FEDERAL COMMUNICATIONS COMMISSION WASHINGTON OFFICE OF THE CHAIRMAN July 6,2017 The Honorable Carol Shea-Porter U.S. House of Representatives 1530 Longworth House Office Building Washington, D.C. 20515 Dear Congresswoman Shea-Porter: 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 Carol Shea-Porter 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, OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable John Shimkus U.S. House of Representatives 2217 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Shimkus: 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 John Shimkus 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 Ajit V. Pai OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Lamar Smith U.S. House of Representatives 2409 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Smith: 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 Lamar Smith 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 Chris Stewart U.S. House of Representatives 323 Cannon House Office Building Washington, D.C. 20515 Dear Congressman Stewart: 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 Chris Stewart 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 cv, OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Steve Stivers U.S. House of Representatives 1022 Longworth House Office Building Washington, D.C. 20515 Dear Congressman Stivers: 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 Stivers 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. OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6,2017 The Honorable Mac Thornberry U.S. House of Representatives 2208 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Thornberry: 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 Mac Thornberry 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. OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Scott Tipton U.S. House of Representatives 218 Cannon House Office Building Washington, D.C. 20515 Dear Congressman Tipton: 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 Scott Tipton 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, I, (j Ajit V. Pai OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6,2017 The Honorable Nydia M. Velazquez U.S. House of Representatives 2302 Rayburn House Office Building Washington, D.C. 20515 Dear Congresswoman Velazquez: 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 Nydia M. Velazquez 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, V. Ajit V. Pai OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Ann Wagner U.S. House of Representatives 435 Cannon House Office Building Washington, D.C. 20515 Dear Congresswoman Wagner: 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 Ann Wagner 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. OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Jackie Walorski U.S. House of Representatives 419 Caimon House Office Building Washington, D.C. 20515 Dear Congresswoman Walorski: 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 Jackie Walorski 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 Tim Walz U.S. House of Representatives 2313 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Walz: 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 Tim Walz 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 Peter Welch U.S. House of Representatives 2303 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Welch: 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 Peter Welch 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, Ir \/vi AjitV.Pai (1 I.' OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6,2017 The Honorable Bruce Westerman U.S. House of Representatives 130 Cannon House Office Building Washington, D.C. 20515 Dear Congressman Westerman: 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 Westerman 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, AjitV.Pai OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6, 2017 The Honorable Joe Wilson U.S. House of Representatives 1436 Longworth House Office Building Washington, D.C. 20515 Dear Congressman Wilson: 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 Joe Wilson 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. OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON July 6.2017 The Honorable Steve Womack U.S. House of Representatives 2412 Rayburn House Office Building Washington, D.C. 20515 Dear Congressman Womack: 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 Womack 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 David Young U.S. House of Representatives 240 Cannon House Office Building Washington, D.C. 20515 Dear Congressman Young: 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 Young 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, V. Ajit V. Pai