Hot on the heels of the FCC’s Order waiving the application of the Budget Control Mechanism (BCM) for the July 2023 to June 2024 period (see ICORE Blog entry of 6/2/23), rural industry advocacy groups have kept the pressure on the Commission to make further changes to the existing ACAM, CAF-BLS, and HCLS support mechanisms.
On 6/2/23, NTCA (a long-time advocate for waiving the BCM) met with the Commission to urge further action to reform the current CAF-BLS and HCLS support mechanisms. Citing its previous proposals made on the record in the Enhanced ACAM proceeding (see ICORE Blog entry of 1/20/23) and subsequent ex-partes, NTCA re-asserted that its proposals would (1) promote the delivery and sustainability of much higher speed broadband services; (2) offer a meaningful complement to proposals made to update ACAM support; and (3) provide greater predictability and budgetary certainty to the Commission and support recipients. In addition, NTCA urged the Commission to adopt its recommendations in the near term to ensure effective coordination with broadband related efforts/programs underway at other federal agencies, most notably the National Telecommunication and Information Administration’s (NTIA) Broadband Equity, Access, and Deployment (BEAD) program.
On 5/25/23, representatives of the Southeastern Rural Broadband Alliance (Alliance) met with the Commission to discuss its proposals to improve the existing CAF-BLS and HCLS processes in the wake of the Commission’s waiver of the BCM. Citing the need to coordinate USF support with funding provided by other federal agencies, the Alliance urged the Commission to quickly implement changes to the existing support mechanisms as previously recommended by the Alliance and NTCA.
The Alliance also reiterated its previously discussed proposal to introduce a voluntary incentive regulation option for CAF-BLS recipients. Under the incentive regulation option, electing providers would see their CAF-BLS support frozen at an adjusted baseline amount. This amount of support would be frozen for six years (2024-2029) and then would decline by 4% for the next five years (2030-2034). Support at the reduced amount would continue until the Commission adopts a new framework of support in the future. Electing providers would commit to deliver 100/20 broadband service to 100% of serviceable locations in their Study Areas with exceptions allowed for good cause. Such exclusions could occur where a provider has accepted a federal or state grant (like BEAD) with an enforceable commitment to provide 100/20 broadband service.
The Alliance points out that adoption of its incentive regulation proposal would help to ensure the efficient allocation of federal support dollars since electing carriers would have an enforceable commitment to deliver 100/20 broadband service and therefore these locations would not be eligible for funding through the BEAD program. This would ensure that BEAD funding and the Commission’s USF support are not directed to the same high cost areas. In addition, the Alliance submits that implementation of the voluntary incentive regulation option would also result in savings for the USF when compared to the current inflation based approach.
Future changes to the existing USF support mechanisms and the accompanying broadband deployment obligations are of critical importance to all rural ILECs, We will continue to monitor developments related to these issues and will provide updates as appropriate.