May 1, 2022 – The Federal Communications Commission (FCC) is set to approve the release of a Notice of Proposed Rulemaking (NPRM) on the Alternative Connect America Cost Model (A-CAM) program at its May 19th open meeting.[1] When adopted, the NPRM will seek public comment on a proposal submitted by the ACAM Broadband Coalition asking the FCC to establish an Enhanced A-CAM program.

This blog post will focus on the parts of the draft NPRM asking which carriers should be eligible to participate in an Enhanced A-CAM program. But first, some background information on the FCC’s A-CAM program and the ACAM Coalition’s proposal.

High-Cost Universal Service A-CAM Program

As part of broad, fundamental reforms to the universal service fund’s (USF) high-cost support mechanism, in 2016, the FCC adopted a process allowing certain rate-of-return ILECs to switch to model-based USF support.[2] Rate-of-return carriers that opted in to the A-CAM receive USF support in exchange for meeting defined build-out obligations.[3] The FCC extended multiple offers to elect cost model support, resulting in multiple iterations of the A-CAM program (A-CAM I, Revised A-CAM I, and A-CAM II), all of which have different constraints, support levels, and deployment obligations.[4] Currently, there are 19 carriers in A-CAM I (support term ends in 2026), 243 carriers in Revised A-CAM I (support term ends in 2028), and 185 carriers in A-CAM II (support term ends in 2028).[5]

The ACAM Broadband Coalition’s Petition For Rulemaking – An Enhanced A-CAM Program

In November 2020, a handful of carriers that receive A-CAM support – the ACAM Broadband Coalition – filed a petition for rulemaking requesting that funding under the FCC’s A-CAM program be extended at current levels for an additional six years – 2029 through 2034.[6] In exchange for lengthening the funding term, the ACAM Coalition proposed new 100/25 Mbps broadband deployment obligations beginning in either 2022 or 2025. Other general details of the plan, as originally proposed by the ACAM Coalition, included voluntary participation, decreased number of locations receiving lower speeds, and no alterations to the A-CAM program’s current framework or annual budget.

Later, the ACAM Broadband Coalition proposed changes to its “A-CAM Enhancement Plan.” Specifically, they proposed that participating carriers be required “to deploy broadband at a minimum speed of 100/20 Mbps to 90 percent of all post-Fabric eligible locations,” with the remaining 10 percent of locations receiving broadband service of at least 25/3 Mbps.[7] However, these proposed modifications also would require one substantial change to the Coalition’s original proposal – implementing the changes would require a significant increase in the yearly A-CAM funding level for each year of the revised program, from $1.087 billion to $1.474 billion (assuming all ACAM companies participate).

The FCC’s Draft A-CAM NPRM – Enhanced A-CAM Program Eligibility

The FCC’s draft NPRM contains two general sections: (1) Issues related to the ACAM Broadband Coalition’s proposal; and (2) proposals to improve administration of the USF high-cost program. The first section on the ACAM Coalition’s proposal breaks down into four subsections: (1) deployment and service obligations; (2) support amounts; (3) carrier eligibility; and (4) elections and other Enhanced A-CAM processes.

The information below summarizes the issues teed up for comment on carrier eligibility to participate in an Enhanced A-CAM program.

Who Should Be Eligible For The Enhanced A-CAM Program?

In its petition, the ACAM Broadband Coalition proposes that each A-CAM I or A-CAM II participant be permitted to elect, on a state-by-state basis, whether to participate in the Enhanced A-CAM program. Those that decline would continue under the terms of the participant’s existing A-CAM program, with no changes.

• Comment is sought on the proposal and whether alternatively, A-CAM participants should be subject to such an “all or nothing” election.[8]

Should A-CAM Companies With Extensive 100/20 Mbps Broadband Be Eligible For An Enhanced A-CAM Program?

The FCC estimates that 75 A-CAM companies have deployed at least 100/20 Mbps broadband service to 75% or more of their proposed Enhanced A-CAM locations, while 33 A-CAM companies serve 90 percent of their locations with at least 100/20 Mbps service. Of these 33 companies, 20 companies already serve all proposed Enhanced A-CAM locations with at least 100/20 Mbps broadband service. To provide another perspective, in total, 347,620 A-CAM eligible locations are served with 100/20 Mbps or faster broadband service.[9]

Comment is sought on the following Enhanced A-CAM eligibility questions and issues related to the FCC’s data on existing 100/20 Mbps broadband service provided by A-CAM carriers:

• Should all current A-CAM I and A-CAM II carriers should be eligible to participate in an Enhanced A-CAM program?

• Given that the stated purpose of providing additional support pursuant to Enhanced A-CAM is to permit carriers to deploy higher levels of 100/20 Mbps or faster broadband, is it an effective use of limited universal service funds to provide support to carriers that have already achieved universal or near-universal deployment of such speeds?

• Given that such carriers may require support for ongoing provision of service in these areas and may have obtained financing to deploy networks with these higher speed levels, is it reasonable to permit them to elect the extended A-CAM term for that purpose?

Should Rate-Of-Return Carriers Receiving Legacy USF Support Be Eligible To Elect To Participate In An Enhanced A-CAM Program?

Even though it’s doubtful an Enhanced A-CAM would be open carriers not currently in the A-CAM program, the FCC has requested comment on whether eligibility for Enhanced A-CAM should be extended to include rate-of-return carriers that currently receive legacy USF support. As its basis for asking this question, the FCC states that “including carriers currently receiving legacy support would be generally consistent with the Commission’s longstanding objective of transitioning away from legacy rate-of-return support mechanisms and providing high-cost support based on a carrier’s forward-looking, efficient costs.”[10] Comment is sought generally on opening eligibility to non-A-CAM rate-of-return carriers and the following questions:

• Would extending Enhanced A-CAM offers otherwise be consistent with the Commission’s goals?

• Are there other eligibility considerations, at the company or census block levels, that should be applied specifically to legacy carriers?

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[1] Connect America Fund: A National Broadband Plan for Our Future High-Cost Universal Service Support, WC Docket No. 10-90; ETC Annual Reports and Certifications, WC Docket No. 14-58; Telecommunications Carriers Eligible to Receive Universal Service Support, WC Docket No. 09-197; Connect America Fund – Alaska Plan, WC Docket No. 16-271; Expanding Broadband Service Through the ACAM Program, RM-11868; Notice Of Proposed Rulemaking, FCC-CIRC2205-02 (Apr. 28, 2022) (Draft A-CAM NPRM), https://docs.fcc.gov/public/attachments/DOC-382821A1.pdf.

[2] Connect America Fund, WC Docket No. 10-90, ETC Annual Reports and Certifications, WC Docket No. 14-58, Developing a Unified Intercarrier Compensation Regime, CC Docket No. 01-92, Report and Order, Order and Order On Reconsideration, and Further Notice Of Proposed Rulemaking, FCC 16-33 (Mar. 30, 2016). In the 2016 Rate-of-Return Reform Order or Order, the offer to receive A-CAM support was not available to any rate-of-return ILEC that had deployed 10/1 Mbps broadband service to 90 percent or more of its eligible locations in a state, based on FCC Form 477 data as of the date of release of the order.

[3] Wireline Competition Bureau Announces Support Amounts Offered To Rate-Of-Return Carriers To Expand Rural Broadband, WC Docket No. 10-90, Public Notice, DA 16-869 (Aug. 3, 2016), https://docs.fcc.gov/public/attachments/DA-16-869A1.pdf.

[4] See 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 (Dec. 13, 2018).

[5] Draft A-CAM NPRM at ¶ 11.

[6] Expanding Broadband Service Through the ACAM Program, RM No. 11868, Petition For Expedited Rulemaking (filed Oct. 30, 2020), https://ecfsapi.fcc.gov/file/103051469192/ACAM%20Broadband%20Coalition%20Petition%20Final.pdf.

[7] Letter from Genevieve Morelli, ACAM Broadband Coalition, to Marlene H. Dortch, FCC Secretary, RM No.11868, WC Docket No.10-90 (Dec. 17, 2021), https://ecfsapi.fcc.gov/file/12171799321573/12.15.21%20Ex%20Parte%20WCB.pdf. See also Letter from Genevieve Morelli, ACAM Broadband Coalition, to Marlene H. Dortch, Secretary, FCC, RM-11868 and WC Docket No. 10-90, at p. 1 (Feb. 17, 2022); Letter from Genevieve Morelli, ACAM Broadband Coalition, to Marlene H. Dortch, FCC Secretary, RM No.11868, WC Docket No.10-90 (Jan. 19, 2022), https://www.fcc.gov/ecfs/filing/1011948411718.

[8] Draft A-CAM NPRM at ¶ 50.

[9] Draft A-CAM NPRM at ¶ 51.

[10] Draft A-CAM NPRM at ¶ 52.