FCC to Increase USF Support for Small Carriers for Faster Rural Broadband

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The FCC Wednesday approved several steps to improve the quality and explain availability of rural broadband. The action increases funding for the Connect America Fund programs providing support for small, rural providers, known as rate-of-return carriers, to deliver faster broadband speeds and expanded coverage. In return, the FCC will require providers to expand availability of service offering downloads of at least 25/3 Mbps, compared to the current 10/1 Mbps standard.

Updates include offering up to $67 million a year in additional support for carriers receiving funding through the Connect America Fund’s Alternative Connect America Cost Model, or A-CAM. This revised offer has the potential to increase by 100,000, the number of rural homes and businesses with access to 25/3 Mbps service, according to the agency.   

The change would open a new window for carriers receiving support through legacy mechanisms to voluntarily move to model-based support through the A-CAM II offer, which incentivizes deployment while reducing regulatory burdens. The agency would also increase the $1.4 billion annual budget for carriers that continue to get support from legacy mechanisms by initiating an annual inflation adjustment. It would eliminate 2018 cuts mandated by budget rules established under the prior Administration and set a guaranteed floor of minimum support for each carrier.  

At the same time, the Report and Order reduces the maximum per-line subsidy in the legacy program from the current $250 to $200 by July of 2021. It also eliminates what carriers said was a burdensome capital expenditures allowance rule, which failed to incentivize investment by companies or to curb waste.  Comments? Email Us.

December 13, 2018

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