RLECs, Adtran Urge FCC to Provide Another $110 Million in CAF Model-Based Support
Rural telcos asked the FCC to fully fund Connect America Fund subsidy support mechanisms for rate-of-return carrier broadband and voice services in high-cost areas. NTCA, WTA, USTelecom, ITTA, other rural telco interests and Adtran asked the commission to provide $110 million annually in additional funding for carriers opting to receive CAF funding based on an Alternative Connect America Cost Model (A-CAM).
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The rural telco groups also asked the FCC to fully fund the revised legacy mechanism for rate-of-return (RoR) carriers not opting into model-based funding; it was updated last year to provide for stand-alone broadband support. They responded to a Dec. 20 order and NPRM that provided $50 million in extra A-CAM funding to meet demand, and that asked for comment on whether to provide more support (see 1612210022). Comments were posted Monday and Tuesday in docket 10-90.
NTCA said the $50 million in extra support helped but wasn't enough to provide "sufficient" support under a congressional mandate. "Because of this ‘budget shortfall,’ tens of thousands of locations nationwide fell from being ‘fully funded’ to ‘capped’ (or from higher speeds to lower speeds within those categories), resulting in the delivery of much lower speeds -- or perhaps no broadband at all -- to those locations," the group commented: An additional $110 million a year "would result in at least 71,000 more locations being ‘fully funded,’ with approximately 47,000 fewer locations consigned to awaiting broadband only if their request is ‘reasonable.’”
Fully funding A-CAM at an initial $200 per location benchmark "would enable 25/3 Mbps broadband service to be deployed to 35,444, and 10/1 Mbps service to be deployed to 35,738, of the more remote and expensive-to-serve locations" to which rural telcos have been unable to extend broadband service, WTA commented. "Full funding would also eliminate the current anomaly and inequity wherein RLECs are scheduled to receive less model-based support per location than their price cap counterparts while being subject to more stringent build-out requirements." TDS Telecommunications commented that the additional support would also have "the benefit of predictability" because the commission wouldn't have to make new A-CAM offers to carriers. Other rural telco groups and Adtran made similar calls for fully funding the mechanism.
If the FCC can't fully fund A-CAM, it should at least provide a partial boost, some said. WTA recommended the commission "take the first $45 million per year of additional CAF Reserve allocation to restore the funding of all affected ACAM participants to a $146.10 per location funding benchmark, and then increase that benchmark as much as possible toward the original $200 per location level; and/or ... extend the term of the ACAM path beyond the present 10 years.”
WTA and others also sought full funding for RLECs on the revised RoR path, which the association said constitute 55 percent of the carriers. WTA said full funding would cost $100 million to $260 million per year without an inflation adjustment, and $41 million to $160 million per year with one. NTCA estimated the shortfall for the RoR mechanism under FCC budget controls will be more than $140 million for 2017. It said the shortfall will hover between $140 million and just over $160 million per year if USF growth rates equal 10-year inflationary averages, but could exceed $260 million per year if the growth assumptions are higher. The group urged the FCC to act upon its related petition for reconsideration.