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FEDERAL COMMUNICATIONS

COMMISSION

WA S HIN GTON

June 27, 2014

OFFICE OF

THE CHAIRMAN

The Honorable Ron Johnson

United States Senate

386 Russell Senate Office Building

Washington, D.C. 20510

Dear Senator Johnson:

Thank you for your follow-up letter supporting the implementation of a universal service

mechanism to allow rural rate-of-return carriers to receive support for broadband-only lines. I

understand and appreciate your concerns that this proposed policy not result in increasing the

USF contribution factor that carriers pass onto their customers. Your views are very important,

and will be included in the record of this proceeding and considered as part of the Commission's

review.

The Commission sought comment on a proposed stand-alone broadband funding

mechanism for rate-of-return carriers in the Connect America Fund Further Notice of Proposed

Rulemaking_that we adopted in April. In doing so, the Commission specifically proposed that

such a mechanism be designed to remain within the existing rate-of-return budget. We expect a

robust record on this topic, and I welcome a dialogue with you and other stakeholders as to how

best to accomplish our shared objectives.

As you note, the landmark 2011 USFIICC Transformation Order and Further Notice of

Proposed Rulemaking (FNPRM) established the Connect America Fund to support the delivery

of the best possible voice and broadband experiences to rural America within the confines of our

Connect America budget. I look forward to continuing the work of reforming and modernizing the

universal service fund high-cost program -

as well as other components of the Fund- and to working

with stakeholders, including rural carriers and consumers, to ensure that all Americans have access to

robust voice and broadband services.

I appreciate your interest in this matter. Please let me know if I can be of any further

assistance.

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