USF High-Cost Order Built on Consensus, O'Rielly Says

FCC reform of the USF high-cost program for rate-of-return carriers was based on an unusual level of collaboration (see 1602190056), FCC Commissioner Mike O’Rielly said at a Faegre Baker lunch Tuesday. “At my request, a number of Commissioners worked extensively with the requisite trade associations in order to fully understand their concerns and the impact of any changes,” O’Rielly said, according to his written remarks posted by the agency Wednesday. The event was closed to the news media. “I also traveled to a number of places around the country to hear firsthand from carriers," said O'Rielly. "After almost a year of discussions, I believe we have a solid framework that provides regulatory certainty for rate-of-return carriers for years to come.” Compared with some of the other areas tackled by the agency, rate-of-return reform was “one of the more inclusive procedural efforts that I have been part of at the Commission,” he said. The order addresses “antiquated rules” to allow reimbursement for stand-alone broadband, he said. The order also imposes build-out requirements and other strictures to ensure money is “wisely and efficiently spent, while providing transitions where appropriate,” he said. O’Rielly had less good to say about two items expected to get a vote at the agency’s March 31 open meeting. Lifeline program changes (see 1603080024) must include controls on the size of the program, O’Rielly said. “I have made clear that I’m willing to support expanding the program to cover broadband but, in return, the Commission must adopt a reasonable overall budget at the same time,” he said. “That is non-negotiable.” O’Rielly also raised concerns about an expected NPRM on privacy rules for ISPs (see 1603080067). The net neutrality order is still pending before the courts, he said, so FCC authority to act is in question. “The Commission doesn’t understand how its new burdens will impose unnecessary and costly compliance on broadband providers,” he said. “Who does the Commission think is going to pay for this? Additionally, by all measures the Commission is ill-prepared to address the complexity of privacy matters, lacking the history and necessary expertise.”