On May 2, 2019, the Wireline Competition Bureau (Bureau) released a revised version of the Alternative Connect America Cost Model (A-CAM) v2.5.1 and announced the offers of model-based A-CAM II support to rate-of-return carriers that are still receiving legacy support to fund the deployment of voice and broadband-capable networks in their service territories. On the same day, the Bureau announced the posting of information regarding the revised mandatory deployment obligations that will apply to rate-of-return carriers that decline the A-CAM II offer and will remain on legacy universal service support mechanisms.

 ACAM II HIGHLIGHTS 

 Deadline to Make ACAM II Election – Carriers must submit a letter signed, by an Officer of the company, confirming that the carrier elects the A-CAM II support amount and commits to satisfy the specific service obligations associated with that amount of model support to the Bureau at ConnectAmerica@fcc.gov by June 17, 2019. Carriers who do not timely file an election letter will be deemed to have declined the revised offer and will continue to receive current support amounts and be subject to Connect America Fund Broadband Loop Support deployment obligations.

 ACAM II Offers and Obligations – The ACAM II offer provides support with a threshold of $52.50 to $200 for capped funding per location for each Non-Tribal rate-of-return carrier and support of $39.38 to $213.12 per location for Tribal carriers. Also provided for support comparison purposes are each carrier’s 2018 claimed federal support along with the build-out obligations for each carrier with broadband service deployment obligations for 25/3, 4/1, and reasonable request locations.

 Transition Payments – Carriers whose ACAM II offers are less than their 2018 claimed federal support are eligible to receive transition payments for a period based on the percentage difference between the ACAM II offer and their 2018 support amount. The following describes how the FCC will provide the transition payments:

  1. If the difference between a carrier’s model-based support and its base year support is 10 percent or less, it will receive, in addition to model-based support, 50 percent of that difference in program year one, and then will receive model support in program years two through ten. 
  2. If the difference between a carrier’s model-based support and its base year support is 25 percent or less, but more than 10 percent, it will receive, in addition to model-based support, an additional transition payment for up to four years, and then will receive model support in program years five through ten. The transition payments will be phased-down 20 percent per year, provided that each phase-down amount is at least five percent of the total base year support amount. If 20 percent of the difference between a carrier’s model-based support and base year support is less than 5 percent of the total base year support amount, the transition payments will be phased-down 5 percent of the total base year support amount each year.
  3. If the difference between a carrier’s model-based support and its base year support is more than 25 percent, it will receive, in addition to model-based support, an additional transition payment for up to nine years, and then will receive model support in year ten. The transition payments will be phased- down 10 percent per year, provided that each phase-down amount is at least 5 percent of the total base year support amount. I f 10 percent of the difference between a carrier’s model-based support and its base year support is less than 5 percent of the total base year support amount, the transition payments will be phased-down 5 percent of the total base year support amount each year.

LEGACY CAF-BLS HIGHLIGHTS 

 CAF-BLS Obligations – Carriers that do not elect to take the ACAM II offer will remain on legacy universal service support mechanisms and will need to select one of two methods (weighted average and model-based) for determining their 25/3 deployment location obligations that must be fulfilled over a five-year period (2019-2024). The Universal Service Administrative Company (USAC) will publish instructions regarding how each carrier is to make its selection between the two methods along with the election deadline.

The FCC will count towards the new five-year obligation any locations CAF-BLS carriers deployed to with at least 25/3 Mbps since May 25, 2016. CAF-BLS carriers that have not previously had High-Cost Universal Broadband (HUBB) portal reporting obligations will be provided an opportunity to certify, as needed, 25/3 Mbps or higher locations deployed to since May 25, 2016.

 Please contact your GVNW consultant or Steve Gatto (830.895.7226), sgatto@gvnw.com with any additional questions you may have about the ACAM II Offer and Obligations and the CAF-BLS Deployment Obligations.