FCC Chair Jessica Rosenworcel has shared a proposal for an Enhanced A-CAM rural broadband program with her fellow commissioners.
The modifications are based, in large part, on a request made by a coalition of rural broadband providers over a year ago.
If the order that Rosenworcel has circulated is adopted, small rural providers who get funding through the A-CAM (Alternative Connect America Cost Model) program would be required to deploy broadband at speeds of at least 100 Mbps downstream and 20 Mbps upstream to meet buildout requirements. Providers also would get more time to make the deployments and would see an “incremental increase in support,” the FCC explained in a press release.
Current program rules only require deployments at speeds of 25/3 Mbps, and funding is based on deployments at that speed.
According to the FCC press release, the order would also “provide an opportunity for legacy rate-of-return carriers to bring 100/20 Mbps broadband to their customers in return for a term of stable support.”
Both the A-CAM and legacy rate-of-return programs are part of the FCC Universal Service Fund program, which has existed for many years to cover some of the costs of providing telecom and broadband services to high-cost areas so that service can be offered at rates comparable to those in urban areas.
Enhanced A-CAM
The proposed rule changes are logical, considering that areas lacking service at speeds of 100/20 Mbps would be considered “underserved,” according to rules for the upcoming $42.5 billion BEAD rural broadband funding program. If rules are not changed, rural providers who are deploying USF-funded service at 25/3 Mbps could see those areas eligible for BEAD funding and potentially overbuilt by competitors receiving BEAD funding just a few years later.
As Derrick Owens, CEO of WTA—Advocates for Rural Broadband, explained in a session at the Oregon Telecommunications Association meeting in Bend, OR last week, “if you have this commitment to provide service, competitors may say they want to build service” but there would be documentation that although no one offers 100/20 Mbps service yet, there is a commitment for someone to deploy it and therefore the areas would not be eligible.
Although the proposed Enhanced A-CAM order has not yet been made public, Owens said he expects that it will call for the program to run through 2038 and require 100% buildout in an area. He also anticipates that providers would have to make elections by October and that the program budget will be around $1.4 billion per year.
The order probably won’t include specific funding that will be offered to providers, Owens said. He noted that CostQuest is developing the data that will be used to make the offers and said he expects that if the order is adopted, the FCC will issue an addendum to the order at a later date that will include the funding offers.
One provider that has a lot to gain from the proposed A-CAM rule changes is TDS Telecom. The company, which has the distinction of being a publicly held rate-of-return provider, has argued that an enhanced A-CAM program would enable the company to upgrade broadband more quickly in comparison with the BEAD program.
