In a previous edition of the ICORE Blog (10/18/22), we discussed recommendations to the FCC by NTCA, The Rural Broadband Association. In this posting we provide additional information and background relative to this important issue.
As a result of the CARES Act, the American Rescue Plan Act (ARPA) and the Infrastructure and Investment and Jobs Act (IIJA) significant amounts of federal funding have been made available for grant programs to advance broadband deployment. The ARPA provides $350B in funding and broadband deployment would be an acceptable application. The IIJA provides an additional $65B specifically for broadband deployment. Generally, funding from ARPA and IIJA grant programs requires deployment of broadband at speeds of 100/20. In contrast, presently the deployment obligations relative to ACAM and CAF-BLS support require a top speed of 25/3.
In May of last year, the FCC issued a NPRM seeking comments on a proposal by the ACAM Broadband Coalition (Coalition) to achieve widespread deployment of broadband at speeds of 100/20 in rural areas served by carriers receiving broadband support. Comments and reply comments were required to be filed by July of last year. In addition, numerous ex-partes on Enhanced ACAM have been filed in support of the Coalition’s proposal. NTCA has filed several ex-partes which are discussed in some detail below.
The Coalition’s proposal would require ACAM carriers to deploy broadband at speeds of at least 100/20 to 90% of locations, as determined by the Fabric, in eligible census blocks, and at least 25/3 to the remaining 10% of locations. To fund the increased deployment costs, the Coalition proposed increasing monthly support for participating ACAM carriers to the higher of 80% of a company’s model-estimated costs or $300 per location. The proposal calls for the increased support to take effect immediately, with the increased support paid retroactively to the beginning of 2022 and extending through the end of 2034. Participation in the Enhanced ACAM proposal would be voluntary for existing ACAM carriers.
As mentioned above, NTCA has been an active participant in this proceeding. NTCA filed Comments, Reply Comments, as well as numerous ex-partes . The most recent ex-parte occurred on January 12, 2023, in support of its comments and proposals made in their initial and reply comments. In general, NTCA’s comments are supportive of the Coalition’s proposal. In its comments in the NPRM, NTCA recommends that the CAF-BLS recipients annual budget should be recalibrated at the current level of demand as a new baseline for support. NTCA further suggests that the per line support cap should be increased from $200/mth to $250/mth and a forward looking inflationary factor should be applied. In exchange for the aforementioned enhancements to support amounts, CAF-BLS recipients would be required to provide broadband at speeds of 100/20 to at least 90% of locations in their study areas.
In an October 14, 2022 ex-parte, NTCA modified it original proposal. In lieu of the 90% commitment to broadband at speeds of 100/20, NTCA proposed an option for ACAM and CAF-BLS carriers to provide 100/20 service to 100% of eligible locations and a second option for carriers to commit to 100/20 service to 97% of eligible location. ACAM carriers electing the 100% option would receive support for an extended period of time and/or additional funding beyond the original proposal. CAF-BLS carriers electing the 100% option would be exempt from the Budget Control Mechanism (BCM) for a period of five years and would receive support up to a $300/line cap. ACAM carriers electing the 97% option would receive enhanced and extended support at a level that enables and sustains such deployment while CAF-BLS recipients electing the 97% option would be exempt from the BCM for three tears. Those ACAM recipients and CAF-BLS recipients that do not elect either the 100% option or the 97% option would continue to receive support at existing levels and would be required to meet existing deployment obligations.
We believe that it’s very likely that the FCC will take action in the near future to address the current deployment obligations and support levels for ACAM and CAF-BLS recipients. Billions of federal dollars have been earmarked via the CARES Act, ARPA, and the IIJA for broadband deployment at speeds of at least 100/20. It’s hard to envision the FCC continuing to allow the ACAM and CAF-BLS programs to remain unchanged when these programs require only 25/3 broadband service.