FCC Releases Revised Support Offers For Existing A-CAM Carriers, Sets March 27 Deadline To Accept
February 25, 2019 – The FCC’s Wireline Competition Bureau has released a Public Notice announcing revised offers of Alternative Connect America Cost Model (A-CAM) support and associated revised deployment obligations for the 262 carriers that have already been authorized to receive A-CAM.[1] These carriers have until March 27, 2019, to notify the FCC whether they accept the revised amount of model-based support. Each carrier’s revised state-level offer of model-based support and revised deployment obligations are detailed in A-CAM Report 14.
A New Offer For Existing A-CAM Carriers – $200 Per Location
In the December 2018 Rate-Of-Return Reform Order, the FCC made a new set of model support offers to existing A-CAM carriers based on support of up to $200 per location, per month. [2] This means that for these A-CAM carriers, all locations in their service areas with costs above $52.50 will be funded up to a per-location fund cap of $200. The revised support offers, however, are tied to an obligation to build out 25/3 Mbps broadband service to additional locations.
Carriers receiving A-CAM support under the new offer must deploy 25/3 Mbps broadband service to a number of eligible locations equal to at least 50%, 65%, or 85% of the number of fully funded locations, depending on the density of the population in the carrier’s service territory –
50% of fully funded locations for low density carriers
65% of fully funded locations for medium density carriers
85% of fully funded locations for high density carriers[3]
On the bright side, for those carriers that accept, the A-CAM term will be extended by two years. The term of the revised offer will be ten years, beginning January 1, 2019, and running until December 31, 2028.[4]
As explained in the December 2018 Rate-Of-Return Reform Order, carriers electing the revised A-CAM offer also must meet the deployment milestones to which they previously agreed with respect to 10/1 Mbps broadband service. But, the additional two years will apply to these obligations as well – each carrier will be required to serve at least 40% of the requisite number of eligible locations by end of the 2022, 50% by the end of 2023, 60% by the end of 2024, 70% by the end of 2025, 80% by the end of 2026, 90% by the end of 2027, and 100% by the end of 2028.[5]
That being said, the Wireline Competition Bureau has clarified that deployment of 25/3 Mbps broadband service to a location will also count as 10/1 Mbps deployment. Here is the Bureau’s explanation:
Pursuant to the current authorizations, a carrier must provide at least 10/1 Mbps service or faster to a number of eligible locations equal to 40 percent of fully funded locations by 2020, and an additional 10 percent of fully funded locations each year until 2026. Pursuant to the revised offer, an electing carrier must provide 25/3 Mbps or faster service to 40 percent of its required 25/3 Mbps locations by 2022, and an additional 10 percent each year until 2028. A company electing the revised offer must separately meet each set of milestones, but any location served with at least 25/3 Mbps service would satisfy both milestones. For example, a carrier that must deploy 25/3 Mbps service to 100 locations by 2022 pursuant to the revised offer would be able to count those locations toward the milestones for the current authorization because, by definition, any location with 25 Mbps service has service of at least 10/1 Mbps.[6]
A-CAM Report 14 – Revised Support Amounts & Deployment Obligations
Each carrier’s revised state-level offer of model-based support and revised deployment obligations are detailed in A-CAM Report 14. More specifically, Report 14.1 shows the following for each holding company:
The current authorized amount of state-level A-CAM support
The total number of fully funded locations pursuant to the current authorization, on which the interim milestones for the deployment of at least 10/1 Mbps broadband service are based
The number of locations to which the carrier must deploy 25/3 Mbps, 10/1 Mbps, and 4/1 Mbps by the end of the 10-year term of the current authorization, as well as the number of locations to which the carrier must provide 4/1 Mbps service upon reasonable request
The revised amount of state-level A-CAM support pursuant to the revised offer
The total number of funded locations pursuant to the revised offer
The total number of eligible locations to which the carrier must deploy 25/3 Mbps service by the end of the revised 10-year term of the revised offer, and on which the interim milestones for the deployment of 25/3 Mbps service are based
The number of locations to which the carrier must deploy 10/1 Mbps and 4/1 Mbps service by the end of the 10-year term of the revised offer, and the number of locations to which the carrier must deploy 4/1 Mbps service upon reasonable request
The number of locations to which a carrier must provide service in order to meet interim deployment milestones pursuant to the current authorizations and the revised offers[7]
Notification Of Acceptance Requirements – March 27, 2019 Deadline
Carriers have until March 27, 2019, to notify the FCC whether they accept the revised amount of A-CAM support by submitting an election letter to the Wireline Competition Bureau at ConnectAmerica@fcc.gov.[8] To accept, a carrier must submit an A-CAM election letter, signed by an officer of the company, that confirms the carrier: (1) elects the revised model-based support amount, and (2) commits to satisfy the specific service obligations associated with that amount of support. If a carrier fails to submit an election letter by the March 27th deadline, it will be deemed to have declined the revised A-CAM offer.
____________________
For More Information On This Topic, Try These Blog Posts:
A-CAM II: A New Model Offer for “Legacy” Rate-of-Return Carriers (November 2018)
FCC Provides More Funding For A-CAM Carriers (March 2018)
A-CAM Companies Make Final Push For More Funding (December 2017)
***** Footnotes *****
[1] Wireline Competition Bureau Announces Offers Of Revised A-CAM Support Amounts And Deployment Obligations To Authorized A-Cam Companies To Expand Rural Broadband, WC Docket No. 10-90, Public Notice, DA 19-115 (Feb. 25, 2019) (Public Notice). If all A-CAM carriers accept, the total cost of increasing the per location funding cap to $200 will be $67 million per year. Any increase in A-CAM funding will not affect USF support available to rate-of-return carriers that receive support pursuant to revised cost-based rules.
[2] Connect America Fund, WC Docket No. 10-90; ETC Annual Reports and Certifications, WC Docket No. 14-58; Establishing Just and Reasonable Rates for Local Exchange Carriers, WC Docket No. 07-135; Developing a Unified Intercarrier Compensation Regime, CC Docket No. 01-92, Report And Order, Further Notice Of Proposed Rulemaking, And Order On Reconsideration, FCC 18-176 (rel. Dec. 13, 2018) (December 2018 Rate-Of-Return Reform Order) (“These revised offers, in effect, fund the initial offers extended by the Bureau on August 3, 2016, before those offers were reduced for budgetary reasons.”).
[3] December 2018 Rate-Of-Return Reform Order at ¶ 23.
[4] December 2018 Rate-Of-Return Reform Order at ¶29.
[5] Id. at ¶29. Under the original A-CAM, accepting carriers agreed to deploy at least 10/1 Mbps service to a number of locations equal to 40% of fully funded locations by the end of 2020, 50% of fully funded locations by the end of 2021, 60% of fully funded locations by the end of 2022, 70% of fully funded locations by the end of 2023, 80% of fully funded locations by the end of 2024, 90% of fully funded locations by the end of 2025, and 100% of fully funded locations by the end of 2026. Connect America Fund et al., WC Docket No. 10-90 et al., Report And Order, Order And Order On Reconsideration, And Further Notice Of Proposed Rulemaking, FCC 16-33, ¶32 (2016) (2016 Rate-of-Return Reform Order).
[6] Public Notice at p. 2.
[7] Public Notice at p. 2.
[8] Carriers submitting election letters will receive an e-mail confirming receipt and should contact the Bureau no later than 4 p.m. on March 27, 2019 if they do not receive such confirmation. Confirmation of receipt does not constitute authorization to receive A-CAM support pursuant to the terms of the second revised offer. Carriers electing the revised offer of model-based support will not begin receiving such support until the Bureau issues a public notice authorizing the Universal Service Administrative Company to disburse the appropriate amounts. Public Notice at p. 1-2.