There’s a lot more behind the news that the FCC plans to increase the minimum broadband speed target in rural areas that wasn’t detailed in FCC Chairman Pai’s recent blog post about current commission initiatives. The plan to increase the minimum broadband speed is just one aspect of a 125-page order that the FCC will consider next month.
Also detailed in the order: a plan to make new offers of model-based A-CAM broadband support to rural rate-of-return (ROR) carriers. In addition, the FCC wants to establish a specific budget for ROR carriers that remain on the traditional Universal Service Fund (USF) program, to increase broadband build-out speed requirements and to use a different budget control mechanism for the traditional USF program. And the commission wants to create a new auction to award broadband funding for lines in ROR territories where competitors have made extensive deployments.
New A-CAM Broadband Offers
Initial A-CAM broadband offers targeted ROR carriers that had not deployed broadband at speeds of 10 Mbps downstream and 1 Mbps upstream to at least 90% of eligible locations. Carriers were offered funding based on a cost model to deploy service at speeds of 10 Mbps downstream and 1 Mbps upstream or 25/3 Mbps to unserved locations, depending on population density and other factors.
The order that the FCC will vote on next month proposes to make a new A-CAM broadband support offer to carriers that are already on that program and to make an A-CAM support offer to virtually all other ROR carriers, including those that were not previously eligible because they already had deployed broadband at speeds of 10/1 Mbps to 90% or more of eligible locations.
Highlights of what the FCC is proposing for ROR carriers currently receiving A-CAM support and who would receive a new support offer:
- Carriers would be eligible for funding for additional locations within areas where they are currently receiving A-CAM funding, with target locations now including those that don’t already have 25/3 Mbps service.
- Targets call for carriers to build 25/3 Mbps service to at least 50%, 65% or 85% of fully funded locations, depending on the density of the population in the carrier’s service territory.
- Carriers would have 10 years to meet the new build-out requirements, essentially extending the total funding period to 12 years, as two years already have passed on the initial program.
Highlights of what the FCC is proposing for ROR carriers that do not currently receive A-CAM support and who would receive a new offer, to be known as A-CAM II:
- These carriers would receive model-based broadband support offers for areas where a competitor has not deployed 25/3 Mbps broadband in combination with voice service.
- According to the draft order “in addition to the deployment requirements previously required of A-CAM recipients, carriers accepting the new model offer will be required to deploy 25/3 service to a number of locations equal to the number of eligible fully funded locations in their service area.”
- The new model offer would be fully funded up to the $200 per-location cap.
- Carriers would be required to deploy service at speeds of at least 4/1 Mbps to 25% or 50% of locations that are not fully funded by the end of the support term, depending on housing density, except for the most sparsely populated areas, where carriers would be required to offer at least 4/1 Mbps service upon reasonable request.
- Carriers must deploy service with a minimum usage allowance of “the higher of 170 GB per month or “one that reflects the average usage of a majority of consumers” and must meet minimum standards for latency and voice quality.
Highlights of what the FCC proposes for carriers that opt to remain on the traditional USF high-cost program:
- Unlike currently, this program would have its own budget which would be adjusted annually for inflation. The FCC proposes to set that budget at $1.42 billion annually, but it would be adjusted downwards to account for carriers currently on the program that accept the new A-CAM offer. Currently, as the FCC explains, carriers on the traditional program essentially receive whatever is left of the total annual budget of $2 billion for ROR carriers after the A-CAM program is funded.
- Carriers that opt to remain on the traditional USF high-cost program will be required to deploy service at speeds of 25/3 Mbps to a “defined number of unserved locations by the end of 2021.” Previously those carriers were only required to deploy 10/1 Mbps to target locations.
- The budget control mechanism for the traditional program would be based only on a pro rata reduction applied as necessary and would not include a per-line component that, according to the FCC, did not result in a “fair balance.”
The auction that the FCC is proposing is described in a notice of proposed rulemaking included with the order that the FCC will vote on next month.
The auction would pertain where an unsubsidized competitor offers service to 100% or nearly 100% of an ROR carrier’s service area. If an auction drives lower support levels for an area, the funding freed up would be redistributed to other USF recipients.
According to the FCC, there are eight legacy study areas with 100% overlap and 15 legacy study areas with at least 95% overlap. These areas are targeted to receive $12 million in support in 2018, the commission said.