USAC Publishes Resources to Calculate Capital Investment Allowance

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The Universal Service Administrative Company (USAC) has published two resources to aid rate-of-return carriers in determining their Capital Investment Allowance (CIA), which sets a maximum for capital investment expenses that a rate-of-return carrier may include for purposes of calculating High-Cost Loop Support (HCLS) and Connect America Fund Broadband Loop Support (CAF BLS).

First, USAC has published illustrative results showing each carrier’s allowance had CIA had been
applied to each carrier’s 2015 investment. Second, USAC has published a worksheet that allows a carrier
to calculate the CIA based on its own inputs. Using this worksheet, a carrier may replicate the illustrative
2015 results, calculate its 2017 allowance, or test alternate investment plans. USAC has also published
additional documentation of the CIA methodology to accompany the illustrative results and template.
The illustrative results, the template, and the documentation of the methodology are available at
http://www.usac.org/hc/tools/default.aspx.

The Bureau emphasizes that the 2015 results are illustrative only, and that allowances applicable
in 2017 and subsequent years will be determined based on carrier data for those years. Neither the
illustrative results nor the worksheet reflects the existence of special circumstances that the Commission
concluded would affect a carrier’s allowance, as set forth in section 54.303(k) of the Commission’s rules.
The Bureau expects that carriers will first report the existence of special circumstances concurrently with
the submission of actual cost data for 2017, subject to procedures to be announced at a later date.

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