Deployment Obligations for Rate-of-Return Carriers
On October 6, 2016, the FCC released a Public Notice (DA 16-1141) announcing the availability of information regarding the mandatory deployment obligations that will apply to rate-of-return carriers who remain on legacy universal service support mechanisms.
This information is now posted on USAC’s website on the High Cost Program Search Tools page.
Tariff Procedures Order Released
Also on October 6, 2016, the FCC released the Tariff Procedures Order (DA 16-1145). It establishes procedures for the filing of access charge tariffs and Tariff Review Plans (TRPs) for incumbent local exchange carriers (LECs) subject to rate-of-return regulation (rate-of-return LECs) electing to offer broadband-only loop service beginning January 3, 2017.
Thanks to the many carriers who joined us on October 6 for the webinar, "Rate-of-Return Reform Order Q&A."
As directed in the Rate of Return Reform Order (released March 30, 2016), USAC has posted to its website resources to aid rate-of-return carriers in determining their capital investment allowance (CIA). Visit the High Cost Search Tools page to view the illustrative CIA results, the CIA worksheet, and documentation of the calculation methodology.
About the Rate-of-Return Capital Investment Allowance
The CIA 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). As adopted in the Rate-of-Return Reform Order, the CIA will first apply to investment made in 2017.
Calculate Your Investment Allowance
The CIA Resources provide illustrative results showing a carrier’s allowance, had CIA had been applied to its 2015 investment, and a worksheet that allows carriers to calculate the CIA based on their own inputs. In addition, documentation of the CIA methodology is available to accompany the illustrative results and template.
Join the FCC Wireline Competition Bureau Staff and USAC for a webinar on October 6 to discuss the status of implementation of the 2016 Rate-of-Return Reform Order.
Rate-of-Return Reform Order Q&A
The session will begin with a short presentation, but most of the time will be dedicated to Q&A with the FCC. The agenda includes:
Register Now: 2016 Rate-of-Return Order Q&A
Thursday, October 6, 2016 at 1:00 PM ET
Carriers are encouraged to submit questions in advance using the "Questions and Comments" section of the registration form.
This session will be recorded and posted to USAC's Online Learning Library for later viewing. A recording of the Rate-of-Return Reform Order webinar presented in April 2016 is also available on that page, along with the slide deck and Q&A.
If you have any questions about the event, please contact HC Questions.
Join the FCC and USAC for a webinar on October 6 to discuss the status of implementation of the 2016 Rate-of-Return Order. The session will include a short presentation, followed by an open Q&A. Carriers are encouraged to submit their questions in advance using the "Questions and Comments" section of the registration form.
The session will be recorded and available for later viewing in the Online Learning Library.
The FCC issued a Public Notice (DA-16-1052) announcing that to implement Connect America Fund Broadband Loop Support. All carriers are required to file (with USAC) forecasted cost and revenue data for the first six months of 2017 by October 1, 2016.
The forecasted cost and revenue data associated with consumer broadband-only loops, in addition to the previously collected common line data, will be collected on a revised version of FCC Form 508.
The updated FCC Forms 507, 508 and 509 and their instructions can now be accessed on the High Cost Program Forms page.
State commissions and carriers receiving High Cost Program support must submit the Section 54.314 Certification to USAC and the FCC by October 1, 2016, to fulfill the annual certification requirements pursuant to 47 CFR Section 54.314.
Since October 1 falls on a Saturday this year, submissions received by Monday, October 3, 2016 will be considered timely.
Section 54.314 Certification Resources
More information about the Section 54.314 Certification is available at the bottom of the High Cost Program Forms page. Resources available include frequently asked questions (FAQs), filing guides, sample letters, and the Section 54.314 Online Video Series.
In the Rate of Return Reform Order (released March 30, 2016), the Federal Communications Commission (FCC) adopted limits on operating expenses (OpEx) eligible for support under the High Cost Loop Support (HCLS) and Connect America Fund Broadband Loop Support (CAF-BLS) support mechanisms. We recently notified carriers subject to the limits beginning in January 2017 via email.
An Operating Expense Limitation Worksheet (.xls) that contains the FCC's OpEx limitation formula that will be used for HCLS and CAF-BLS (formerly ICLS) payments beginning in January 2017, as well as Notes on FCC OpEx Limits are now available on USAC's High Cost Program Search Tools page.
The worksheet allows carriers settling on a cost basis to calculate potential OpEx adjustments by entering expense data for any 12-month data period to be evaluated.
Average schedule companies can use the worksheet to see their maximum allowable OpEx, but any potential cost adjustments will be calculated through the average schedule formulas similar to the existing corporate operations expense limits.
In the Rate of Return Reform Order (released March 30, 2016), the Federal Communications Commission (FCC) adopted limits on operating expenses (OpEx) eligible for support under the HCLS and CAF-BLS High Cost Program support mechanisms.
USAC has completed the determination of OpEx limits on a carrier basis. If your carrier is affected, you should have received an email with details about your OpEx limits.
Need help? Contact us.
On August 10, 2016, the FCC released a Public Notice announcing a preliminary list and map of census blocks that have been deemed initially eligible for the Connect America Fund (CAF) Phase II auction. The list and the map are on the FCC website. Notifications of additional coverage data are due by August 31, 2016.
FCC Issues Compliance Guide for RoR USF Obligations, Reporting
On August 11, 2016, the FCC issued a Small Entity Compliance Guide describing the service and reporting obligations for rate-of-return (RoR) carriers that voluntarily elect, on a state-level basis, to receive CAF A-CAM model-based support or that choose to remain on legacy mechanisms. The guide details various performance, deployment, and reporting obligations for all RoR carriers receiving High Cost Program support, including speed, latency, data usage, buildout, reporting, certification, recordkeeping, interconnection, and pricing.
FCC Releases Minor Corrections to A-CAM
On August 15, 2016, the FCC released a Public Notice with minor changes to the reports showing the model-based Connect America Fund support amounts offered to rate-of-return carriers originally released on August 3, 2016. Specifically, the report now includes a revised support amount for Fremont Telecom and corrections to the short names previously assigned to seven study areas. No other changes were made and all other companies’ support amounts remain the same.
Please stay up to date with your regulatory filings. USAC reminds rate-of-return carriers that it will withhold funding from carriers that do not submit data needed to calculate High Cost Program support.
In the Rate of Return Reform Order released on March 30, 2016, the FCC created a model-based funding mechanism for rate-of-return carriers and is asking carriers to choose between the new cost model and a modified version of the existing support system.
Carriers that elect the new Alternative Connect America Model (A-CAM) will receive a set amount of monthly support over 10 years and will need to meet defined build-out obligations. Carriers that choose to stick with the modified legacy funding mechanism, Connect America Fund Broadband Loop Support (CAF-BLS), will receive funding - and be required to meet deployment obligations – that are calculated using data submitted by carriers.
Specifically, the FCC and USAC will use FCC Form 477 data to conduct competitive overlap analysis and calculate deployment obligations; study area boundary data to calculate study area density and set operating expense limitations; and data to determine the capital investment allowance. Without this information, USAC will be unable to calculate carrier support, including support for carriers that elect the CAF-BLS path, and will withhold funding until this information is submitted.
Carriers should therefore be certain that all data filed with the FCC, including FCC Form 477 data and study area boundary data, are up-to-date and accurate. Any data revisions should be filed as soon as possible. These filings are in addition to the FCC Form 481 (54.313), the annual use certification (54.314) and deployment data (54.316) that carriers are required to submit in order to receive High Cost Program support (as specified in 54.903).