FCC Pumps Additional Funds into ACAM While Also Looking to Additional Reforms

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In a 3-2 vote, the FCC has released a Report and Order, Third Order on Reconsideration, and Notice of Proposed Rulemaking (NPRM) providing up to $36.5 million of additional annual Alternative Connect America Cost Model (ACAM) support for rate-of-return carriers. In addition to opening up more funds, the item adopts additional Universal Service Fund (USF) reforms, modifies a budget restriction, and considers additional funding and reform proposals. Specifically, the item extends revised ACAM offers at $146.10, which is the same per-location cap offered to price cap carriers in Connect America Fund (CAF) Phase II model-based support and which will be offered to CAF Phase II auction winners. The item also granted requests by NTCA to include an inflation adjustment in the opex limitation calculation and to eliminate the effect of the budget control mechanism for the June 2017 to July 2018 period in order to alleviate carrier hardships caused by the $180 million reduction in support caused by the mechanism’s application. The NPRM solicits comment on proposals for new funding opportunities as well as new reforms.  Proposals include fully funding existing ACAM support recipients, affording a new opportunity for legacy providers to elect model-based support, establishing a minimum support threshold for legacy providers that would not be subject to a budget cap, as well as capping capital and operating expenses, using an auction to address “substantial” competitive overlaps, and simplifying the legacy rate-of-return mechanism.  Commissioners Clyburn and Rosenworcel dissented in part due to the item’s lack of consumer net neutrality protections. Comments on the NPRM will be due 30 days after publication of the item in the Federal Register, which has not yet occurred, and replies will be due 30 days thereafter.

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