Bureau Claims New Rate-Of-Return Cost Model Increases High-Cost Support

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The FCC’s Wireline Competition Bureau (Bureau) has released an updated version of the rate-of-return local exchange carrier cost model: the Alternative Connect America Cost Model version 1.0.1 (A-CAM v1.0.1). The model breaks down into two modules. The first is a cost module that calculates costs for all areas of the country, and the second is a support module that calculates support based on the costs calculated by the first module. A-CAM v1.0.1 uses high-cost support recipients’ new minimum speed standard of 10 Mbps downstream and 1 Mbps upstream to determine the presence of a cable or fixed wireless competitor. It also incorporates State Broadband Initiative (SBI) data reflecting coverage shown on the National Broadband Map as of June 2013. Additionally, the Bureau has released illustrative model results for each rate-of-return study area in the country utilizing a variety of different assumptions in the support module. These results illustrate seven different scenarios. According to the Bureau, “under all seven scenarios, more than half of the rate-of-return study areas in the country would receive more support if they elected voluntarily to receive model-based support than they do today under the legacy support mechanisms.”

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