The Federal Communications Commission has adopted a Notice of Proposed Rulemaking seeking comment on how it can modernize or replace certain existing high-cost universal service support mechanisms. Citing changes in broadband technology and significant broadband deployment by many providers, the Commission is examining how certain high-cost mechanisms that apply to rate-of-return carriers should evolve It is specifically considering changes to those mechanisms that are not subject to forward-looking buildout obligations, namely Connect America Fund Broadband Loop Support (CAF BLS) and High Cost Loop Support (HCLS). The Commission is also considering next steps with respect to areas supported by the sunsetting Alternative Connect America Cost Model (A-CAM) I, Revised A-CAM I, and A-CAM II.
The Commission frames three potential paths forward for these programs: (1) updating the existing program; (2) adopting new single support mechanism; or (3) allowing the funding mechanism to wind down. To this end, the FCC seeks comment on whether continued subsidies are appropriate in areas with competitive overlaps and seeks comment on whether future support should be more narrowly targeted and conditioned on performance obligations. The NPRM also emphasizes the need to avoid duplicative support, noting that funding areas already served by unsubsidized competitors is an inefficient use of limited universal service resources.
