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WASHINGTON, DC 20510

May 6, 2014

461

The Honorable Thomas Wheeler

Chairman

Federal Communications Commission

445 12th Street SW

Washington, DC 20554

Dear Chairman Wheeler:

We commend the Federal Communications Commission (FCC) for its ongoing efforts to

modernize the Universal Service Fund (USF). As reforms move forward, the FCC must adhere

to its statutory directive to provide mechanisms for universal service of advanced

communications that are both sufficient and predictable. As part of these ongoing efforts, we

call on the FCC to implement a mechanism for rural rate-of-return carriers allowing them to

receive USF support for broadband-only subscribers in high-cost areas ofthe United States.

American households increasingly choose to meet their voice communication needs by

abandoning their traditional landline "plain old telephone service" (POTS) options in favor of

wireless and voice over Internet protocol services. These scenarios are increasingly common

nationwide, in both urban and rural areas. Consumers today want the choice to fashion their own

communications solutions to suit their needs, and that no longer necessarily includes POTS.

The rules governing USF support in rural areas have not kept up with this dynamic, consumer-

driven market development. As you know, under current USF rules small rural carriers can

receive high-cost support only for those consumers who subscribe to POTS. USF is supposed to

increase broadband deployment, facilitate transition to new communications technologies, and

bridge the digital divide, but the outdated paradigm may unintentionally have the opposite effect.

The cycle created by the FCC' s current rules could, if not addressed in a timely manner,

undermine consumer choice, deter broadband adoption, and inhibit technological evolution.

We recognize that USF reform requires difficult policy balancing. We support measures that

ensure High Cost Program distributions are targeted appropriately and invested prudently. The

fiscal integrity and accountability ofUSF provide the credibility necessary for the FCC to fulfill

its statutory mandate to ensure rural communications services and prices are reasonably

comparable to those in urban areas.

Given our shared commitment to rural consumers, we urge the FCC to propose rules, under

authority granted by section 254 of the Communications Act, to carefully update existing USF

mechanisms to provide sufficient and predictable support where consumers in areas served by

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smaller rural carriers affirmatively choose to adopt only broadband services even where POTS is

also available to them. While it is important that the FCC complete its implementation of Phase

II of the Connect America Fund in areas served by larger carriers this year, the FCC should

nonetheless address smaller carrier support mechanisms expeditiously, accounting for their

unique operations. Consumers in areas served by smaller rural carriers should have the same

fundamental choices among reasonably comparable services at reasonably comparable rates as

consumers in other rural and urban areas.

Sincerely,

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U.S. Senator

U.S. Senator

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MARK PRYOR

U.S. Senator

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KELL

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U.S. Senator

U.S. Senator

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DEAN HELLER

U.S. Senator

U.S. Senator

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DEB FISCHER

TOM HARKIN

U.S. Senator

U.S. Senator

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DAN COATS

U.S. Senator

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DICKDURBIN

Minority Leader

Assistant Majority Leader

LINDSEY GRAHAM

U.S. Senator

JEANNE SHAHEEN

U.S. Senator

U.S. Senator

ORRIN HATCH

DEBBIE STABENOW

U.S. Senator

U.S. Senator

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JERRY MORAN

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U.S. Senator

U.S. Senator

RONWYDEN

U.S. Senator

U.S. Senator

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MARK UDALL

U.S. Senator

U.S. Senator

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JOHN BARRASSO

BALDWIN

U.S. Senator

U.S. Senator

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U.S. Senator

U.S. Senator

SRISCH

U.S. Senator

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ALFRANKEN

U.S. Senator

U.S. Senator

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U.S. Senator

U.S. Senator

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ROBPORTMAN

U.S. Senator

U.S. Senator

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