Enhanced A-CAM

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As previously discussed on this site, on 7/24/23, the FCC issued its Enhanced A-CAM (EA-CAM) Order which included an offer of increased USF support to existing ACAM carriers and Legacy Support carriers in exchange for increased commitments to deploy broadband services to all unserved locations at speeds of 100/20. Carriers accepting the EA-CAM offer had to do so by 9/29/23. Prior to the acceptance date, on 9/15/23, NTCA filed a Petition for Reconsideration (PFR) with the Commission addressing certain aspects of the Order. NTCA’s PFR addressed the following issues:

* In the PFR, NTCA addressed the identification of the presence of unsubsidized competition. The EA-CAM support offers excluded locations that were deemed to be served only by an unsubsidized competitor that offers via its own facilities, voice and broadband services at speeds of 100/20 using wireline or fixed terrestrial wireless technology. Further, the Order reduces support for locations that are served by both an ILEC and an unsubsidized competitor. NTCA points out that in spite of the FCC’s stated goal of compatibility with the BEAD Program, the EA-CAM program accepts the use of unlicensed fixed wireless service by an unsubsidized competitor which the BEAD Program does not. In addition, in regard to the issue of unsubsidized competitors in general, the Commission acknowledges that there may be areas where claims of coverage by unsubsidized competitors may be deficient and maintains that there will be opportunities for carriers electing EA-CAM to challenge such claims through the BDC processes. NTCA counters this assertion and states that the BDC process does not provide the level of detail required to make meaningful challenges and instead re-states its position that the Commission should adopt a certification process whereby a would-be unsubsidized competitor would provide a reasonable amount of information to establish its capabilities to provide the required level of services.

*  NTCA asserts that carriers electing EA-CAM should be allowed to rescind their election when subsequent adjustments to the EA-CAM offer reduce support by more than 20%. A key element of the EA-CAM offers was that while acceptance of the offer is binding, the support amount received could be adjusted through 12/31/25 based on corrections to the location Fabric or coverage claims as of the date of the offers. More specifically, if after adjustments the number of required locations for deployment are at least 95% of the number reflected in the offer, no adjustment to support would occur. However, if adjustments result in the number of required locations being less than 95% but greater than 85% of the number of required locations in the offer, the amount of the offer would be stepped down over a two year period including a true-up so that support received over the two year period would reflect the reduced amount of locations. Finally in cases of greater reductions to the number of required locations, the support amount would be entirely recalculated. Conversely, in cases where the number of required locations increases, additional support would be provided only to the extent that the EA-CAM budget allows. NTCA asserts that there could be a point where potential support reductions would be so significant that a carrier’s ability to meet its obligations is threatened and suggests that in cases of a 20% or greater reduction in support, a carrier should be allowed to rescind its EA-CAM election.

* Noting that the Commission generally sought to align the objectives of EA-CAM with the Bead Program, NTCA believes that in a few respects the Commission deviated from BEAD in ways that create significant challenges for electing carriers. The first instance involves the Commission’s position on unlicensed fixed wireless service and its treatment of this service as reliable which is contrary to the Bead Program’s perspective. Secondly, regarding the broadband deployment milestones, the EA-CAM milestones require the delivery of 100/20 service to 50% of required locations by the end of 2026, 75% by the end of 2027, and 100% by the end of 2028. The Commission’s rules allow for an additional 12 months to meet the final milestone if needed. In contrast, the BEAD Program timeline is not expected to require 100% deployment until 2030 and will likely provide an additional year for the final milestone. NTCA urges the Commission to consider a change to the deployment schedule to better align the EA-CAM Program with BEAD. NTCA’s proposal recommends 25% deployment by the end of 2026, 50% by the end of 2027, 75% by the end of 2028, and 100% by the end of 2029 with a one year extension to 2030 where needed. A third area where the EA-CAM Order deviates from BEAD is in the area of required cybersecurity risk management plans. NTCA asserts the requirements specified in the EA-CAM Order are far more extensive than the requirements outlined in the BEAD program and urges the Commission to align the requirements of EA-CAM with the BEAD Program.

* NTCA also addressed the issue of ongoing support for locations that are currently unserved but will be served with 100/20 service by an ILEC using funds from a grant awarded prior to the EA-CAM offer. The EA-CAM offers provide a reduced level of existing support for ILEC-only served locations. The rationale for this is the acknowledgement that even though these locations are already built-out and receiving 100/20 service, the ILEC will continue to incur ongoing operational and depreciation related costs associated with these already constructed locations. Conversely, the EA-CAM offers provide no support for locations that will receive 100/20 service in the future using grant funding awarded prior to the EA-CAM offers.  NTCA asserts that a comparable level of support should be provided for these locations as that provided for ILEC-only served locations. Although a grant awarded prior to the EA-CAM offers will provide initial funding to cover at least a portion of the capital costs of deployment, these locations should be provided a level of ongoing support equivalent to that provided for ILEC-only served locations for the same reasons applied for those locations. NTCA acknowledges that this issue is addressed in the Notice of Inquiry that accompanied the EA-CAM Order but urges the Commission to address the issue in the context of this PFR.

The NTCA PFR addresses several important issues and concerns and warrants immediate action by the Commission. We will continue to monitor this issue and will provide updates as the situation evolves.

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