USF High-Cost Program: Best and Realistic Timelines

According to the FCC's most recent report, nearly 14 million Americans lack any access to fixed broadband. In an effort to remedy this, in 2011, the Commission established the Connect America Fund (CAF) within the USF high-cost program to provide federal universal service support to private carriers serving high-cost parts of the nation. While progress has been made to implement various parts, thanks to the great work of staff, there hasn't been a sense of urgency at the Commission due to a lack of energy and commitment to complete the hard tasks that remain. Sadly, unless something significant changes, unserved Americans will have to wait even longer to get access to broadband.

Like many, I was pleased that, at recent Congressional hearings, Chairman Wheeler provided additional insight on the timeline for CAF reforms to Members of the House and Senate who want to see faster progress, as I have advocated for over a year. It's especially good news to hear the Chairman promise to complete a CAF not just for the larger rate-of-return (ROR) carriers but also for the smaller ROR carriers by the end of this year and to hold a CAF Phase II auction for price cap areas next year. I take him at his word that he intends to try to meet his commitments. The problem is that, when I mapped out the steps that would need to occur to meet these promises, it became obvious that it's extremely unlikely that the Commission will be able to adhere to that schedule. Many of the individual actions and program steps are interconnected. For instance, it seems unlikely that the Commission would set up a CAF for very small ROR carriers without knowing which carriers will opt-in to a CAF ROR model.

Outlined below in chart form is what I believe to be the "best case" timing scenario for each CAF item, assuming that CAF is the top priority for staff in the Wireline Competition Bureau (WCB) and the Wireless Telecommunications Bureau (WTB) and that there is stakeholder consensus on any outstanding issues. In reality, however, WCB is focused on other complex, high-profile issues including net neutrality, mergers, special access, Lifeline, inmate calling, and forbearance, and WTB is focused on the broadcast incentive auction, among other things. While it is true that there are teams within each Bureau still dedicated to CAF, some members have been assigned to these other issues, and upper management will need to work on other projects as well. Accordingly, I've also presented a more "realistic case" scenario that acknowledges both these resource constraints, as well as a lack of consensus on certain CAF components, including the CAF Phase II auction. To provide clarity for all those interested, I do not believe that the Commission still intends to implement a CAF Phase II Mobility Fund, and so it is not an accident that it is excluded in the realistic version.

Notably, these are just the steps needed to adopt Commission rules as presently contemplated. After the Commission acts, it will still take months for funding to flow, and it will be years before some unserved consumers can sign up for new broadband service.

I hope to be proven wrong about the timeline. In fact, I would welcome suggestions for ways to streamline and accelerate the remaining tasks. But it is important that all stakeholders understand the process and likely timing of reforms so that we can have that discussion.

Consequently, whenever people start to discuss reforming, modernizing or updating the current communications statute, one area that comes to my mind is the USF high-cost program. And it wouldn't necessarily take a lot of effort to generate tremendous progress. All that is needed would be to set deadlines and milestones for the Commission to act on the existing parts in a timely manner. That simple step – combined with a mandate not to increase the overall costs on American consumers – would likely have a demonstrable impact on broadband deployment in rural America.