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The United States Congress authorized the FCC to implement the Universal Service Fund (USF). The USF is mandated by Section 254 of the Telecommunications Act of 1996.

What is the Universal Service Fund?

The USF is a government administered fund, not a government paid fund, to support the provision of telecommunications services in rural and high cost areas, low income consumers and to schools, libraries and healthcare facilities nationwide. All telecommunications customers contribute to the USF on an equal basis.

How does it work for Paul Bunyan Communications?

The Universal Service High-Cost program of which Paul Bunyan Communications is a part of is designed to ensure that consumers in rural, insular, and high-cost areas have access to telecommunications services at rates that are affordable and reasonably comparable to those in urban areas. The program fulfills this universal service goal by allowing eligible carriers who serve these areas to recover some of their operating costs from the federal Universal Service Fund. The fund reimbursement is based only on local phone service subscriptions.

What has changed?

The FCC order released on November 18, 2011 established annual benchmarks for how much must be charged for local service by USF high cost program participants to remain eligible for the program. In compliance with these requirements, Paul Bunyan Communications must raise our monthly local phone service rate to match the benchmark rates if/when they are increased by the FCC.

How will this be implemented?

Annually as the FCC deems necessary. We must meet the required minimum rate as ordered by the FCC in order to continue to receive support funds from the USF program.

Why don’t you just opt-out of the USF program?

If we gave up the support funds we receive, local rates we would need to charge would rise significantly, higher than the mandated minimums issued in the FCC order. Our cooperative serves over 5,000 square miles, a vast majority of which is rural, high cost service areas. The fund was created to ensure access to telecommunication services at rates comparable to urban areas but that would not feasible without the funding we have received through this program.

Will I continue to be required to subscribe to a line of local phone service to receive broadband Internet and PBTV services?

Yes. Since the FCC continues to base USF reimbursement on local phone line subscriptions we must keep this requirement in place. If we did not require a phone line subscription, the cooperative would not receive USF funding and the rate for broadband Internet and PBTV service would have to be adjusted accordingly which would result in rates at least four times that of the current monthly service. We do anticipate changes to this requirement in the future, but it will need to remain in place as long as USF is based only on local phone networks.

What has Paul Bunyan Communications done with the USF funding it has received?

Exactly what the program was intended for. Maintaining our existing telecommunications network to provide reliable services and upgrade it to offer advanced communication services available in urban areas.

We were one of the first in the country to upgrade our network so that all customers, no matter how rural, could receive broadband Internet services. We also were one of the first to offer television services with broadband Internet and telephone services over the same network. At the same time, we’ve maintained affordable rates on all of the service we provide, comparable to those you would find in Minneapolis, Chicago, and New York.

What has Paul Bunyan Communications done to resolve the problem?

State and national industry organizations that we are members of have been actively lobbying for rural telecommunication providers. Unfortunately, there are many competing interests involved and this FCC order will hurt you, our cooperative and rural Americans across the country. We will continue to support lobbying efforts aimed at creating a USF that achieves its mission as the law states. Until further changes are made, we must operate within the existing regulations as a USF high cost participant.

Who can I call to voice my concerns?

You may contact the Federal Communications Commission, US Senator, or US House of Representative. Please share your experiences with our cooperative providing you access to advanced communication services and encourage them to seek Universal Service Fund reform that is less onerous to rural Americans and rural communication service providers.

Federal Communications Commission

Federal Communications Commission
445 12th Street, SW
Washington, DC 20554

United States Senators

Tina Smith
720 Hart Senate Office Building
Washington, DC 20510

Amy Kloubuchar
425 Dirksen Senate Office Building
Washington, DC 20510
202-224-3244 or toll free 1-888-224-9043

United States House of Representatives

Collin Peterson, District 7
2211 Rayburn HOB
Washington, DC 20515
Phone: 202-225-2165
Pete Stauber, District 8
126 Cannon HOB
Washington, DC 20515
Phone: 202-225-6211