CAF Broadband Loop Support

Established by the FCC in 2016, the Connect America Fund Broadband Loop Support (CAF BLS) program provides support for voice and broadband service, including stand-alone broadband. The fund, a reform of Interstate Common Line Support (ICLS), helps carriers recover the difference between loop costs associated with providing voice and/or broadband service and consumer loop revenues. The 2016 order set a five-year deployment term for CAF BLS carriers. In 2018, the FCC set a $1.42 billion CAF BLS budget, which rises annually with inflation, and reduced the monthly per-line limit on support from $250 to $225 as of July 2019 and $200 as of July 2021. The 2018 order also established new deployment obligations for carriers remaining on CAF BLS support and restarted the five year deployment term, requiring CAF BLS carriers to expand deployment of broadband at speeds of 25/3 Mbps by the end of 2023.  Learn more.

Please see the Rate-of-Return Reform webpage for more information about FCC orders targeting rate of return carriers.

Deployment Requirements

In the 2018 Rate-of-Return Reform Order, the FCC revised the minimum 10/1 Mbps speed requirement for CAF BLS broadband deployment established by the 2016 Rate-of-Return Reform Order. The 2018 order requires carriers receiving CAF BLS to comply with the following deployment obligations, calculated using the most recently available FCC Form 477 data:

• Carriers that are less than 20 percent deployed at speeds of at least 25/3 Mbps must use 35 percent of their CAF BLS support to deploy 25/3 Mbps broadband service
• Carriers that are greater than 20 percent but less than 40 percent deployed at speeds of at least 25/3 Mbps must use 25 percent of their CAF BLS support to deploy 25/3 Mbps broadband service
• Carriers that are at least 40 percent deployed at speeds of at least 25/3 Mbps must use 20 percent of their CAF BLS support to deploy 25/3 Mbps broadband service

Carriers that receive CAF BLS support may elect one of two methods for determining their deployment obligations over the program’s five-year term. Deployment obligations would be calculated by dividing the applicable CAF BLS funding by:

• the average cost of providing 25/3 Mbps service, based on the weighted average cost per loop of carriers that have deployed 25/3 Mbps service to 95 percent or more of the locations in their study area, or 150 percent of the weighted average cost per loop of companies with similar density and level of deployment, whichever is greater (Weighted Average Cost Method)
• Or the ACAM calculation of the cost per location of providing 25/3 Mbps service in the unserved census blocks in the carrier’s study area (ACAM Method)

Please see this spreadsheet for carrier-specific deployment obligations.

The FCC has deferred the start of the next five-year deployment obligation term for CAF BLS carriers until January 1, 2025. (See FCC 23-118)

Annual Filing Requirements

Carriers receiving CAF BLS support must comply with the following filing and certification requirements annually:

• March 1: Submit and certify deployment data in the HUBB showing where the carrier built out broadband using CAF support in the previous calendar year (and complete separate deployment milestone certifications) or certify that the carrier has “no locations to upload.” Carriers must report latitude and longitude coordinates, minimum speeds offered and date of deployment, among other information, for every location where mass-market, high-speed Internet service is available. Submit Locations in the HUBB. USAC will conduct verification reviews to confirm deployment to a random sample of locations reported in the HUBB following each deployment milestone. Carriers must notify the FCC and USAC, and relevant state, U.S. Territory or Tribal governments if applicable, within 10 business days after the applicable deadline if they have failed to meet a build-out milestone (see 47 CFR Section 54.320(d)).
  • All CAF BLS carriers are subject to HUBB filing obligations, including CAF BLS carriers that were exempt from HUBB reporting in the past because they had already built out 10/1 Mbps broadband to at least 80 percent of their study area.
  • The HUBB will not accept any locations deployed before May 25, 2016, the effective date of the 2016 Rate of Return reform order, and CAF BLS carriers cannot count locations deployed before that date toward their build-out obligation unless they are fully deployed to every location in their study area.
    • CAF BLS carriers that were fully deployed by the end of 2023 – meaning that they had deployed broadband at speeds of at least 25/3 Mbps to all locations in their study area by the end of 2023 – but cannot meet their defined build-out obligation because they could not find any additional locations to serve have satisfied their build-out obligation. This includes CAF BLS carriers that had deployed to some or all of the locations in their study area before May 25, 2016. These carriers should certify to full deployment in the HUBB as part of a special end-of-term CAF BLS certification. See details below. Fully deployed carriers should not attempt to record any broadband locations built prior to May 25, 2016, in the HUBB, but still need to file any locations deployed in 2023 or certify “no locations to upload” for the year.
• March 31: Submit FCC Form 508 to report projected cost and revenue data, and submit FCC Form 507 to report line counts (required).
• July 1: Submit speed and latency test data from performance measures testing conducted in the previous calendar year at a random sample of locations reported in the HUBB that have active subscribers. (USAC encourages carriers to file and certify test results on a quarterly basis after each quarter’s testing is complete.) Submit speed and latency test data in the Performance Measures Module.
• July 1: Certify financial and operational data collected by FCC Form 481.
• July 31: Submit FCC Form 507 to report line counts, if filing quarterly (optional).
• September 30: Submit FCC Form 507 to report line counts, if filing quarterly (optional).
• October 1: Certify that the carrier is eligible to receive High Cost support and used all support received in the proceeding calendar year only to provide, maintain and upgrade the facilities for which the support was intended and will do the same in the coming calendar year. State utility commissions certify carriers under their jurisdiction as eligible telecommunications carriers (ETCs). Carriers not subject to state jurisdiction self-certify. Learn more about the annual ETC certification.
• December 31: Submit FCC Form 509  to report actual cost and revenue data, and FCC Form 507 to report line counts, if filing quarterly (optional).

End-of-Term Certification for CAF BLS Carriers

Because CAF BLS carriers face one final, five-year milestone (for deploying broadband at speeds of at least 25/3 Mbps to 100 percent of required location counts) by end of 2023, all CAF BLS carriers that have enough locations certified in the HUBB to meet the fund’s 100 percent milestone by the end of 2023 must complete a separate milestone certification in the system as part of the annual HUBB filing due by March 1, 2024.

In addition, all CAF BLS carriers – including those that were fully deployed in their study area by the end of 2023 but do not have enough locations certified in the HUBB to complete the 100 percent milestone certification – must complete a special end-of-term certification as part of the HUBB annual certification due by March 1, 2024. This end-of-term-certification functionality requires every CAF BLS carrier to select one of the following options indicating that, as of Dec. 31, 2023, it:

• Offered voice and broadband service to 100 percent of its defined locations
  • Carriers in this category deployed enough locations at speeds of at least 25/3 Mbps after May 25, 2016, to meet their defined deployment obligation and should also complete the 100 percent milestone certification in the HUBB.
• Offered voice and broadband service to 100 percent of the locations in its study area
  • Carriers in this category were fully deployed at speeds of at least 25/3 Mbps to all locations in their study area by the end of 2023, but cannot meet their defined deployment obligation (or complete the 100 percent milestone certification in the HUBB) because they could not find any additional locations to serve. This includes carriers that were fully deployed before May 25, 2016, and were therefore unable to report any locations in the HUBB, as well as carriers that became fully deployed after that date and have therefore reported some or all of their locations in the HUBB.
• Did not offer voice and broadband service to 100 percent of its defined locations
• Did not offer voice and broadband service to 100 percent of its defined locations because of the monthly per-line limit on Universal Service support

Related Orders

Rate-of-Return Reform Order (FCC 16-33) – Created CAF BLS via reform of ICLS to support broadband loop costs

Rate-of-Return Reform Order (DA 16-661) – Order addresses several matters arising from the implementation of the Rate-of-Return Reform order, including budget control, operation expense limitation, and capital investment allowance

Rate-of-Return Reform Order (FCC 18-29) – Order codifying rules about eligible expenses and offering additional ACAM support for expanded broadband deployment

Rate-of-Return Reform Order (FCC 18-176) – Order establishing ACAM I Revised and ACAM II and adopting new deployment obligations for rate-of-return carriers

Public Notice (DA 19-373) – Notice regarding revised deployment obligations for incumbent rate-of-return carriers

Rate-of-Return Reform Order (FCC 23-118) – Order deferring the commencement of the next five-year deployment obligation term for legacy rate-of-return carriers receiving CAF BLS in 2024 until January 1, 2025