FCC Updates Price Cap Cost Model, Releases First Rate-of-Return Cost Model

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The FCC’s Wireline Competition Bureau (Bureau) has released version 4.2 of the Connect America Cost Model (CAM v4.2). It incorporates the FCC’s decision in the December 2014 Connect America Order to exclude from Connect America Fund (CAF) Phase II support any census block that is served by a subsidized facilities-based terrestrial competitor offering fixed residential voice and broadband services meeting speeds of at least 3 Mbps downstream and 768 kbps upstream. The Bureau has also released illustrative results that show the number of CAF Phase II eligible locations and funding benchmarks produced by CAM v4.2. Additionally, the Bureau has announced the availability of the first version of a cost model that could be used by rate-of-return carriers that voluntarily elect to transition to model-based support – the Alternative Cost America Model version 1 (A-CAM v1.0). It is fundamentally the same cost model as the CAM 4.2, but subsequent versions of the A-CAM will incorporate study area boundary data submitted by rate-of-return carriers, along with other rate-of-return-specific adjustments.

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