The FCC Wireline Bureau announced a new “rate...

The FCC Wireline Bureau announced a new “rate floor” of $20.46 a month Thursday (http://bit.ly/1eWEVvf). It’s part of the agency’s attempts to phase out excessive subsidies for basic phone service, “which allowed some phone companies to charge their customers as little as $5 a month” when the average suburban or urban customer was paying $16, said Chief Julie Veach in a statement (http://fcc.us/Ny4wTU). “The reforms have been gradually eliminating these excessive subsidies to level the playing field for all consumers and contain the cost of the program, which is funded by universal service fees ultimately paid by consumers.” A new rate survey found that the average monthly rate in urban and suburban areas is $20.46, higher than the agency expected, an FCC official told us, so the bureau is seeking comment on extending the phase-in. Comments in docket 10-90 are due March 21, replies March 31. Commissioner Ajit Pai opposes the rate floor, saying in a statement that it’s equivalent to “a rate hike of up to 46 percent in the next few months.” Pai opposed what he called an “FCC-initiated increase” in rural phone bills (http://fcc.us/OFnuJ2): “Why should the FCC saddle rural Americans with rate increases when doing so may not save the Universal Service Fund a dime and may in fact divert scarce funds away from broadband deployment? And why should the FCC override state-set rates to raise costs for consumers?” The economy is good for many in Washington, D.C., but “a recovery hasn’t yet reached much of rural America,” Pai said. “Let’s not add to the challenges our fellow citizens face by increasing their phone bills. Instead, let’s freeze the rate floor indefinitely and reexamine this misguided policy."