The enhanced A-CAM program established by the FCC last week could make nearly 583,000 locations – and possibly more — ineligible for funding in the BEAD rural broadband program, according to an analysis by telecom cost analyst Mike Conlow.
The locations potentially won’t be eligible for BEAD because they will be eligible for enhanced A-CAM funding instead. As Conlow noted, this change should enable BEAD dollars to go farther than they otherwise would have.
Both the BEAD program and the enhanced A-CAM program are designed to cover some of the costs of deploying high-speed broadband to locations where such service is not available today. A key difference is that enhanced A-CAM is only open to certain incumbent rural rate-of-return telecom providers.
Enhanced A-CAM is an alternative to a previous rural provider program known simply as A-CAM (for alternative Connect America model.) Enhanced A-CAM has more ambitious deployment targets than A-CAM and, as the FCC has explained, enhanced A-CAM makes “incrementally more” money available for deployments and gives providers a longer time to make deployments.
Previously, only areas lacking service at speeds of 25/3 Mbps were eligible for A-CAM, and funding was based on recipients deploying 25/3 Mbps service. Recipients also were not required to deploy service to every unserved location in their service area.
With Enhanced A-CAM, areas lacking service at speeds of 100/20 Mbps are eligible for funding, and funding will be based on recipients deploying 100/20 Mbps service. Additionally, funding recipients will be required to deploy service to 100% of eligible locations.
The A-CAM participants will have the option of accepting the higher target deployment speed and the additional time and funding. Conlow anticipates that most of the providers eligible for enhanced A-CAM will accept the additional time and funding and the commensurate higher deployment speed goal.
As Conlow explains, areas where the incumbent provider participates in the enhanced A-CAM program will not be eligible for BEAD because they’ll have an “enforceable commitment” from another federal program to deliver BEAD-qualifying 100/20 broadband service.
Individual states are responsible for eliminating areas with enforceable commitments from current FCC broadband availability data in determining areas eligible for BEAD funding.
Removing areas eligible for enhanced A-CAM funding will make a big difference in some states, according to Conlow’s analysis, published on Substack.com.
He notes, for example, that Nebraska has 24,776 locations lacking service at 100/20 Mbps speeds that are in areas eligible for enhanced ACAM. That’s 23% of total unserved and underserved locations in the state, according to BEAD definitions.
BEAD rules define “unserved” areas as those lacking service at speeds of 25/3 Mbps and “underserved” areas as those lacking service at speeds of 100/20 Mbps. States are required to prioritize unserved areas in awarding BEAD funding.
The estimated reduction in Nebraska’s BEAD-eligible locations would mean that the state could set loftier goals for the $405 million allocated to it for the BEAD program. Potentially, more locations might be able to get fiber broadband, rather than a less costly, but also less future-proof, technology, or potentially more “underserved” locations could be upgraded.
It’s important to note that some of the 583,000 U.S. locations that Conlow identified as potentially ineligible for BEAD funding, thanks to enhanced A-CAM, would have been ineligible under the previous A-CAM program because they would have been in line to get 25/3 Mbps service. But those locations would have been considered “underserved” unless the A-CAM recipient chose to deploy service at speeds of at least 100/20 Mbps – a choice that would have required the provider to invest more money in the deployment than the cost model specified.
The number of no-longer-BEAD-eligible locations also should expand because locations lacking 100/20 Mbps service are now eligible for enhanced A-CAM funding and because providers now must deploy to 100% of eligible locations, neither of which was true in the previous A-CAM program.