FCC Finalizes Parts of Connect America Cost Model

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The FCC’s Wireline Competition Bureau (Bureau) has released a Report and Order that finalizes the engineering assumptions contained in the Connect America Cost Model (CAM) and adopts CAM inputs that calculate the cost of serving census blocks in price cap carrier areas.  In the Report and Order, the Bureau also makes numerous other decisions related to the structure and operation of the CACM and Phase II of the Connect America Fund (CAF), including:

  • Price cap carriers serving non-contiguous areas will be offered model-based support, but also be provided the option of receiving frozen support.
  • The Bureau identifies the “likely” funding benchmark that will determine which areas are eligible for the offer of model-based support, which will enable the Bureau to commence the Phase II challenge process.  Specifically, the Bureau tentatively sets the funding benchmark for CAF Phase II support at $52.50 per location and estimates that the extremely high-cost threshold will be $207.81 per location.
  • The Bureau estimates a tentative final budget of $1.782 billion for the Phase II offer of model-based support to price cap carriers.
  • The Bureau estimates that approximately 4.25 million residential and business locations will be eligible to receive model-based CAF Phase II support.

Additionally, the Bureau has concluded that it will use round eight National Broadband Map data (data as of June 2013) to initially identify areas served by unsubsidized competitors.  The list of census blocks eligible for CAF Phase II support will be finalized through a challenge process “in the months ahead.”

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