Jul 2

Jul 2 A-CAM II Errors: FCC Discovers Incorrect Attribution Of Broadband Service In A-CAM II, Extends Election Deadline To July 17

A-CAM II, Broadband, Universal Service, USF, Wireline, Rural Broadband

June 5, 2019 – The FCC’s Wireline Competition Bureau has extended the deadline, by 30 days, for rate-of-return carriers to accept or turn down their offers of Alternative Connect America Model (A-CAM II) support.[1] Rate-of-return carriers were set to indicate, on a state-by-state basis, whether they would elect to transition to model-based support by June 17, 2019. Due to some recently-found errors, the Bureau has extended the deadline to July 17, 2019.

The decision to extend the deadline was made after the Bureau identified errors in 36 offers of A-CAM II support. Of the 36 errors, 34 were instances where the A-CAM incorrectly attributed broadband service provided over a rate-of-return carrier’s own facilities or the carrier’s affiliate to that of an unsubsidized competitor, resulting in census blocks being classified as ineligible for support.

This incorrect attribution problem is not new. Incorrect attribution also was a problem during the run up to the first A-CAM offer a few years ago. It was brought to the attention of the FCC after a few rate-of-return carriers discovered errors with their A-CAM offers. The FCC corrected it in a December 2015 Public Notice before the first A-CAM offers were officially made. Here’s the relevant language:

The Bureau modified the methodology it previously had utilized to identify unsubsidized competitors meeting the Commission’s minimum performance standards for the high-cost program to address concerns raised by rate-of-return carriers that A-CAM treated fixed wireless and cable networks deployed by incumbents or their affiliates as unsubsidized competitors, even though carriers argued that those facilities were used to deliver voice and broadband service in furtherance of their ETC obligations throughout parts of their service territories. In previous versions of A-CAM, broadband technology codes and speed were used to determine whether a census block was served by an unsubsidized competitor. In A-CAM v2.1, any broadband deployment with speeds of at least 10 Mbps downstream/1 Mbps upstream that was reported in FCC Form 477 by a rate-of-return carrier or its affiliates (based on the published “holding company number”) within the study area is treated as telco-served, regardless of technology.[2]

For some reason, the A-CAM is still incorrectly attributing broadband service for certain carriers in certain areas, even though the problem was supposedly fixed. To be clear, the A-CAM II offers come from the same cost model that was used for the A-CAM I offers, but with certain tweaks for A-CAM II.

Since A-CAM II includes rate-of-return carriers that were excluded from the first A-CAM because they had deployed 10/1 Mbps broadband service to more than 90% of their service areas, it’s possible that any errors related to these carriers simply were not addressed.[3] At the time, there was no guarantee that there would be another round of A-CAM offers. But still, it seems that when this problem was fixed the first time, the solution would have been to correct it for every carrier. This might make rate-of-return carriers wonder what other problems, if any, exist in A-CAM II.

As for the other two errors out of the total 36 errors recently-found, they relate to company ownership and study areas. The Bureau made corrections to accurately reflect the common control or ownership (or lack thereof) of study areas in a state, which results in an additional A-CAM II support offer, for a total of 37 corrected offers.

The 30-day extension of the decision deadline applies to all rate-of-return carriers, not just those to which the corrections apply.

The Bureau has released A-CAM Report 16, which shows the state-level offer of model-based support for each carrier that is eligible to elect A-CAM II support. For only the rate-of-return carriers affected by the errors, Report 16 corrects Report 15. No other changes were made, and all other companies’ A-CAM II support amounts and deployment obligations remain the same.

To elect A-CAM II for a state or states, a carrier must submit a letter signed by an officer of the company confirming its decision and committing to satisfy its broadband deployment obligations. Election letters are due on or before July 17, 2019, and should be sent to the Wireline Competition Bureau at ConnectAmerica@fcc.gov. If a carrier fails to submit an election letter by the deadline, it will be deemed to have declined the A-CAM II offer and will continue to receive cost-based universal service support. After submitting an election letter, carriers will receive an e-mail confirming that their letters have been received and reviewed for completeness. Carriers should contact the Bureau no later than 4 p.m. ET on July 17, 2019 if they do not receive a confirmation after submitting an election letter.

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[1] Wireline Competition Bureau Issues Corrected Alternative Connect America Model II Offers To 37 Companies, Extends The Election Deadline, And Seeks Comment On Location Adjustment Procedures, WC Docket No. 10-90, Public Notice, DA 19-504 (June 5, 2019).

[2] Wireline Competition Bureau Releases Alternative Connect America Cost Model Version 2.1 And Illustrative Results For Potential Use In Rate-Of-Return Areas, WC Docket No. 10-90, Public Notice, DA 15-1431, p. 3 (Dec. 17, 2015).

[3] In December 2018, the FCC officially adopted A-CAM II for those rate-of-return carriers that did not previously elect model support or universal service support pursuant to the Alaska Plan. 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, ¶ 31 (rel. Dec. 13, 2018).