Press Release

Today, as part of its continuing open, transparent, and deliberative process to adopt a cost model for Phase II of the Connect America Fund, the Wireline Competition Bureau (Bureau) announces the availability of the next version of the Connect America Cost Model (CAM v4.1). CAM v4.1 contains updated State Broadband Initiative (SBI) Round 8 data,2 modifies certain default input values, and makes a number of technical changes as described below.

Consistent with the process for updating broadband coverage in prior versions of the CAM, the new coverage table removes from the SBI data Cable and Fixed Wireless providers receiving federal high-cost support, as well as those not providing voice services as reported on FCC Form 477 as of June 2013. CAM v4.1 also contains updates to the TelcoMaster table to incorporate corrections to holding companies and related information for individual study areas.

CAM v4.1 also makes certain adjustments to the terrain mix data for the Virgin Islands.4 Given the lack of consistent data regarding rock hardness in the Virgin Islands, further significant additional work would be necessary to examine the soil composition data available for the Virgin Islands in order to determine the relationship between the available terrain data and the cost of deploying a communications network in the Virgin Islands.5   Such a significant undertaking likely would result in an extended delay in finalizing the CAM, which would preclude making the offer of model-based support before the end of 2014.6   Therefore, rather than determining the exact terrain mix in the Virgin Islands, CAM v4.1 approximates the terrain mix by mirroring the terrain mix data used in Puerto Rico.

CAM v4.1 increases the average revenue per user (ARPU) assumption used by the model from $65 to $75. Increasing the ARPU also has a small impact on two model inputs that are calculated as a percentage of ARPU—customer operations marketing expense and bad debt expense. To account for this adjustment, the default model inputs for customer operations and bad debt are based on the higher ARPU with values that are entered on a per-location-passed basis for all carriers.

Finally, CAM v4.1 assumes a 70 percent subscription rate for purposes of calculating funding thresholds.

In addition to a new solution set,10 the Bureau releases a new set of illustrative results reflecting funding threshold of $52.50 (based on an assumed 70% subscription rate with $75 ARPU), available at http://www.fcc.gov/encyclopedia/connect-america-cost-model-illustrative-results, and will shortly be posting to the Commission’s website updated model documentation for v4.1.

Though the default inputs for CAM v4.1 are publicly available at http://www.fcc.gov/encyclopedia/price-cap-resources, these publicly-available inputs exclude an inputs table that provides state-specific capital values for the Virgin Islands. Users that have   signed the relevant attachments of the Third Supplemental Protective Order can view these values in the table “StateSpecificCapex V2” in the CAM v4.1 inputs collection on the “Posted Data Sets” page of the CAM website.

CAM v4.1 is available at http://www.fcc.gov/encyclopedia/caf-phase-ii-models or  https://cacm.usac.org/. In order to access any version of the model, parties must execute the relevant acknowledgement of confidentiality, licensing, and nondisclosure documents released as  attachments to a Third Supplemental Protective Order.  Numerous interested parties have executed the attachments to the protective order and have had full access to each version of the model, enabling them to run their own customized reports.

For additional information on this proceeding, contact Katie King (Katie.King@fcc.gov) of the Wireline Competition Bureau, Telecommunications Access Policy Division, (202) 418-7400.

Press Release

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