All in Rate-of-Return
The FCC has released a draft rural broadband order that will be considered at the FCC’s December open meeting. In the draft order, the FCC adopts a new universal service fund budget for rate-of-return carriers subject to legacy cost-based rules that is based on uncapped 2018 claims, increased annually by inflation. The increased budget comes with the condition that support recipients with deployment obligations provide broadband service at speeds of 25/3 Mbps rather than 10/1 Mbps.
The FCC has released a draft order that revises universal service fund rules that apply to rate-of-return incumbent local exchange carriers. In the order, the FCC offers model-based USF support to all rate-of-return carriers currently subject to “legacy” cost-based rules. The new model offer – A-CAM II –is similar to the original A-CAM offer but with several critical adjustments.
Federal Communications Commission Chairman Ajit Pai has released a draft rural broadband order that will be considered at the FCC’s December 2018 open meeting. Among other things, the draft order provides a new set of model support offers to rate-of-return carriers currently receiving Alternative Connect America Cost Model funding. The new offer provides support of up to $200 per location, per month, tied to an obligation to build out 25/3 Mbps broadband service to additional locations.
The FCC has approved the transfer of control of ComSouth Corporation to Hargray Communications Group, Inc. The transaction involves high-cost universal service fund support provided under two different mechanisms – one fixed and one cost-based. Because the FCC found this situation raises cost shifting concerns that could unfairly increase USF support, it approved the transaction subject to a condition intended to prevent such a result.
NTCA-The Rural Broadband Association has filed comments in response to the FCC’s National Security NPRM, calling the FCC’s proposed rule prohibiting the use of universal service support to purchase equipment and services from blacklisted foreign companies is “overly broad and lacks clarity.” NTCA also identified numerous other concerns with the rule, and likened the NPRM to a notice of inquiry because of the high-level questions asked by the FCC.
The FCC has released a Notice of Proposed Rulemaking that seeks comment on a rule prohibiting the use of universal service fund support to purchase equipment or services from any communications equipment or service providers identified as posing a national security risk to U.S. communications networks or the communications supply chain. Comments are due on or before June 1, 2018, and reply comments are due on or before July 2, 2018.
The FCC’s Wireline Competition Bureau has officially extended 217 revised offers of Alternative Connect America Cost Model support, along with revised deployment obligations, to A-CAM rate-of-return carriers. Each revised offer is based on support up to $146.10 per-location, meaning locations with costs above $52.50 will be funded up to a per-location fund cap of $146.10. Carriers have until June 21, 2017 to accept their revised offers.
On March 23, 2018, the Federal Communications Commission adopted a Report and Order, Third Order on Reconsideration, and Notice of Proposed Rulemaking that continue the FCC’s efforts to reform the high-cost universal service fund support mechanism rules that apply to rate-of-return carriers. In the NPRM, the FCC proposes permanent, minor revisions to the high-cost budget that controls USF support disbursements for rate-of-return carriers.
