High Cost

Trainings & Outreach

HC Reporter - May 2015

May 2015

In this issue...

Program Happenings   |   In the News   |   At the FCC   l   Don't Forget

2015 Local Service Rate Floor and Reasonable Comparability Benchmarks 

The FCC issued a Public Notice (DA 15-470) on April 16, 2015, announcing the 2015 local service rate floor for incumbent eligible telecommunications carriers (ETCs) and the reasonable comparability benchmarks for fixed voice and broadband services. The 2015 rate floor for voice services is $21.22, and the reasonable comparability benchmark for voice services is $47.48. All incumbent local exchange carrier (ILEC) ETCs that are recipients of High Cost Program support must report in their annual FCC Form 481 the number of residential service lines for which the sum of the local rate and state fees (as of June 1, 2015) is below $21.22 by July 1, 2015. Per the June 2014 Order (FCC 14-54), in which the FCC phased in the associated support reductions, to the extent that an ILEC's local rates (plus state regulated fees) in 2015 are less than $16, that carrier's High Cost Program support will be reduced on a dollar-for-dollar basis.
On FCC Form 481, due July 1, 2015, in Section 1000 (Voice Services Rate Comparability), carriers must confirm that the pricing of fixed voice services is no more than two standard deviations above the applicable national average, urban rate for voice service. For Program Year 2016's FCC Form 481 filing, a company must certify that the sum of its local rate and federal Subscriber Line Charge (SLC) is below $47.48.

Changes to FCC Forms 690 and 481 

Both FCC Forms 690 and 481 are due July 1, 2015. Changes to FCC Form 690 this year include: 
  • consolidation of Shapefiles, Drive Test Results, and Scattered Site Test Results onto one line;
  • the elimination of lines requesting how much support was
  • applied to network design, constructions, deployment, and maintenance; and
  • consolidation of lines addressing 3G/4G performance.
Changes to FCC Form 481 this year include:
  • a new benchmark for voice rate comparability which was released in April 2015,
  • the submission of progress reports on five-year plans previously submitted by rate-of-return filers,
  • new procedures to verify holding company information in the 800 section, and
  • new requirements for price cap carriers (2005 section) and rate-of-return filers (3005 section).
In addition, USAC has made adjustments to our systems to provide a more user-friendly experience for completing both forms. In particular, there is now a bulk certification option. Officers who have multiple filings to certify can now access all filings for review in one place and then certify all filings at one time. Also, our dynamic tables templates now accommodate up to 10,000 lines.
Join us for this Thursday's webinar walkthrough of FCC Form 481, and watch the recorded walkthrough of FCC Form 690 for more information.

If a carrier has relinquished its ETC designation, send a copy of the relinquishment order to HC Orders within one week. If USAC does not receive a copy of the relinquishment order within one week, USAC will invoice the carrier for any support paid following the relinquishment. 


FCC Forms 690 and 481 Walkthroughs

USAC held an instructional webinar for FCC Form 690 on April 23. A recording of this webinar is available in the Online Learning Library of the High Cost Program's section of USAC's website.
On Thursday, May 7 at 3:00 PM EDT, USAC will hold a webinar walking through FCC Form 481. Register for this event online and access materials in the Online Learning Library prior to the event to prepare any questions you may have.


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USAC Submits Annual Report

USAC submitted its 2014 annual report to the FCC and Congress on March 30, 2015, to report on its operations, activities, and accomplishments of last year: 
"In 2014, USAC continued on the journey towards helping connect Americans to each other and the world through broadband and Internet access. By keeping a sharp focus on the needs of program participants and through collaboration with stakeholders, USAC implemented program and policy changes in efficient and streamlined ways." – excerpt from the 2014 Annual Report.

Rural Mainers Support Bill to Bring Broadband to Unserved Areas

On April 7, 2015, in The Bangor Daily News, Jen Lynds reported that more than two dozen rural farmers, residents, and business owners who struggle to maintain their businesses and ship their goods because of slow, spotty, or at times nonexistent Internet service spoke in support of legislation that might help them improve coverage. Read More

FCC Official Says Results of Rural Broadband Experiment Teach Incumbents a Lesson

On April 14, 2015, Drew Clark reported on BroadbandBreakfast.com that an official from the FCC, responsible for the agency's unique rural broadband experiment, said the experiment was less about learning than about teaching the rural telecom industry that it can do better. Read More

Read more industry news articles in the High Cost Program's Latest News section.

FCC Publishes Map of Study Areas in Alternative Connect America Cost Model

The FCC issued a Public Notice (DA 15-429) on April 10, 2015, announcing it published an online, publicly accessible map of rate-of-return study areas that will be incorporated into the next version of the Alternative Connect America Cost Model (A-CAM). The A-CAM calculates the forward-looking economic costs of deploying and operating a fiber-to-the-premise network in rate-of-return areas.

FCC Opposes Petitions Seeking Supreme Court Review of Tenth Circuit Decision on 2011 Transformation Order

In March 2015, the FCC filed a Brief (DOC 332762) with the U.S. Supreme Court, opposing the Petitions for Writs of Certiorari filed by NARUC, Cellular South, et al. and Allband, which asked the Court to review the Tenth Circuit's 2014 Opinion denying all petitions for review of the FCC's 2011 USF/ICC Transformation Order. 

Erratum Issued on Connect America Fund Phase II Challenge Process Order

The FCC issued an Erratum (DOC 332974) on April 13, 2015, making corrections to certain text in the Order (DA 15-383) released on March 30, 2015, concluding the Connect America Fund Phase II Challenge Process and providing the final determination regarding all challenged census blocks.

FCC Releases 2015 Tariff Review Plans 

On April 14, 2015, the FCC set forth the Tariff Review Plans (TRPs) that are available for all incumbent local exchange carriers (ILECs) to use to support the annual revisions to the rates in their interstate access service tariffs. Read More

Adak Eagle Asks FCC to for Reconsideration of Per-Line High Cost Program Support Caps

On April 6, 2015, Adak Eagle Enterprises informed the FCC that it is in violation of its Rural Utilities Service (RUS) requirements and, without interim or permanent relief, it will not make the next RUS payment or its payroll or other obligations, and it is considering sale or dissolution of Windy City Cellular and Adak Telephone Utility. Read More

TDS Discusses Voluntary Alternative Regulation Plan

On April 21, 2015, TDS Telecommunications spoke with the FCC about the development of a voluntary alternative regulation plan that could combine elements of proposals submitted to date in the record and take into account agency objectives. Read More

Blackfoot Telephone Supports Alternative Connect America Cost Model

On April 20, 2015, Blackfoot Telephone Cooperative spoke with the FCC to express Blackfoot's support for the Alternative - Connect America Cost Model. Read More

USTelecom Files Proposal on Connect America Fund Frozen Support Allocation

On April 3, 2015, USTelecom filed a letter, attaching a proposal for the FCC to proceed with the reallocation of frozen Connect America Fund support to areas that remain high in cost and unserved after the distribution of Connect America Fund Phase II funding. Read More

USTelecom Files Proposal on Connect America Fund Phase II Competitive Bidding Process

On April 10, 2015, USTelecom filed a letter with an attached proposal for a Connect America Fund Phase II competitive bidding process that USTelecom believes would further the FCC's goals of extending high-speed broadband across the country. Read More

NTCA, WTA, and NECA File Updated Information on Rate-of-Return Broadband Support Proposal

On April 21, 2015, NTCA, WTA, and NECA filed a letter to provide further materials regarding the Rural Associations' joint Data Connection Support proposal for targeted updates to the existing High Cost Program that would facilitate consumer choice in – and the affordability of – voice and broadband services. Read More

Nebraska Carriers File Modifications to Universal Service Fund Reform Plan

On April 20, 2015, Arlington Telephone, Blair Telephone, et al. filed modifications to their original universal service fund reform plan and transition for rate-of-return companies. They indicated the changes reflect feedback from various parties. Read More

Reply Comments Filed on Broadband Deployment Notice of Inquiry

On April 6, 2015, reply comments were filed on the Notice of Inquiry (FCC 15-10), released February 4, 2015, in which the FCC encouraged commenters to offer suggestions on any steps it could take, on its own or in coordination with others, to accelerate deployment of advanced telecommunications capability to all Americans. 
  • NTCA said the FCC could facilitate broadband deployment by acting quickly to adopt tailored and targeted updates to existing universal service fund mechanisms and reforming rules and regulations to ensure that small video providers have access to content according to reasonable terms and conditions.
  • Frontier stated that by proceeding expeditiously with its current plan for Connect America Fund Phase II, the FCC would promote broadband deployment to the Americans who need it most.
  • CCA asserted that the FCC should focus its efforts on promoting broadband platforms that consumers are gravitating towards, such as mobile wireless technologies.

Replies Filed on Letter of Credit Requirements for Rural Broadband Experiments

On March 30, 2015, USTelecom filed comments on Public Notices (DA 15-158 and DA 15-140) seeking comment on the letter of credit (LOC) proposals contained in petitions filed by NTCA, Alliance of Rural Broadband Applicants, and CFC for waivers of aspects of the LOC requirements for rural broadband experiment support. In comments to the FCC, USTelecom recommended that the FCC tailor LOC requirements for Connect America Fund Phase II to more appropriately reflect the amount of funding perceived to be "at risk" because it has yet to be invested in telecommunications plant. 


?Additional comments were submitted on April 13, 2015:

  • NTCA asserted the record makes clear a more tailored approach that broadens the base of financial institutions from which LOC may be obtained and other discrete changes to the calculation and duration of the LOC requirements are warranted to strike a more reasonable balance between accountability and regulatory flexibility.
  • GVNW suggested the LOC requirement should be structured so as to meet the FCC's twin goals of ensuring the integrity of the High Cost Program and encouraging a robust competitive bidding process.
  • WISPA said any LOC requirements the FCC may adopt for Connect America Fund Phase II should address the practical concerns raised by the commenters and should not be so onerous that they impede participation in Connect America Fund Phase II.
  • JSI suggested that the FCC consider alternative methods for ensuring collateral and the financial competence of Connect America Fund Phase II winning bidders, including performance or construction bonds in lieu of LOC or establishing a waiver process for Rural Local Exchange Carrier (RLEC) affiliates in light of the extensive scrutiny RLECs already receive as being ETCs.
  • ACA supported CoBank's proposal that the "LOCs be structured such that the amount increases only through the build-out period," and then should be eliminated upon certification that the plant is operational, or the amount should be reduced to cover only the funds to be disbursed over the coming year.

Read more articles in the High Cost Program's Latest News section.


High Cost Program


May 2015