FCC Clarifies Parts of Rate-of-Return Reform Order

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The FCC’s Wireline Competition Bureau (Bureau) has released an order clarifying how a number of reforms adopted in the Rate-of-Return Reform Order will be implemented.  The March 2016 Rate-of-Return Reform Order gives certain carriers the option to receive universal service support from the Alternative Connect America Cost Model (A-CAM), while those that don’t move to the A-CAM will remain subject to reformed legacy rules.  The Bureau’s clarification order addresses the following issues: calculation of Connect America Fund Broadband Loop Support (CAF BLS) for transferred exchanges; application of the monthly per-line limit on universal service support; calculation of the additional A-CAM and transitional support budget; the date the new operating expense limitation will be implemented; implementation of reductions in the authorized interstate rate of return; timing of the capital investment allowance; average schedule carrier participation in the NECA traffic-sensitive pool; determination of consumer broadband-only loop investment and expenses; calculation of rate-of-return budget controls; and universal service contribution obligations of non-tariffed broadband services.

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