The FCC has adopted an order raising the target speed for the A-CAM rural broadband funding program. In a fact sheet, the commission used the term “Enhanced A-CAM” for the new program.

The previous target speed was 25/3 Mbps. The new target is 100/20 Mbps, which brings it in line with other rural broadband funding programs, including the $42.5 billion Broadband Equity Access and Deployment (BEAD) program.

This is good news for incumbent rural rate-of-return providers who participate in the A-CAM program, including the A-CAM Broadband Coalition, which has been advocating for the rule change for over a year.

The A-CAM program is one of two broadband funding options available exclusively to incumbent rural providers who receive money through the Universal Service Fund (USF) High-Cost Program to cover some of the costs of building and operating telecom and broadband networks in areas that are most costly to serve. Traditionally those providers were reimbursed based on embedded costs, but several years ago, they were offered the option of moving to the A-CAM program, which was based on a cost model and required more aggressive broadband buildout targets.

A large portion of USF high-cost recipients chose the A-CAM option. According to the FCC fact sheet, 447 providers participate in the program. The areas served by those providers include over 2.6 million homes and businesses.

The A-CAM program was set up at a time when 25/3 Mbps was a more adequate target speed than it is today. What complicates matters is that areas with 25/3 Mbps service but without 100/20 Mbps service will be considered “underserved” for purposes of the BEAD program and some other rural broadband funding programs. Those underserved areas would potentially be available for BEAD-funded overbuilds just a short time after the 25/3 Mbps service was deployed.

The new order makes additional funding available to providers on the A-CAM program and gives them more time to meet deployment goals.

The FCC fact sheet lists important things to know about the Enhanced A-CAM program:

  • Requires participating carriers to deploy voice and 100/20 Mbps or faster broadband service to 100% of eligible locations in their areas.
  • Maintains the commission’s long-standing technology-neutral approach for deploying services in rural areas of the country.
  • The program makes $13.5 billion in support available over a 10-year extension of the current A-CAM term.
  • Utilizes the FCC’s National Broadband Map and Broadband Data Collection to determine locations to which participating carriers are obligated to deploy.
  • Aligns deployment milestones with the Broadband Equity, Access, and Deployment (BEAD) Program, requiring participating carriers to deploy to all locations within four years.
  • Complements existing federal, state, and local funding programs, including the BEAD Program, allowing carriers that elect to participate in the Enhanced A-CAM program the opportunity to establish an enforceable commitment to locations they serve.  
  • Requires participating carriers to participate in the Affordable Connectivity Program.
  • Creates an opportunity for legacy rate-of-return carriers to bring 100/20 Mbps to their customers in exchange for a period of fixed support, followed by a transition to the Enhanced A-CAM model.

One of the largest providers on the A-CAM program is TDS Telcom, which has the distinction of being a publicly-held rate-of-return provider. TDS has been arguing in favor of the Enhanced A-CAM program for several months.

Along with the report and order, the FCC adopted a notice of proposed rulemaking and notice of inquiry seeking comment on further reforms to the rate-of-return system and methods for modifying the high-cost program to support ongoing broadband network expenses in light of numerous new broadband funding programs. The new programs are focused on deploying broadband to unserved and underserved areas, and rural providers have been arguing that ongoing support will be needed after those networks are built.

Additional information about Enhanced A-CAM is available in the report and order.

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