FCC Record, Volume 26, No. 22, Pages 17663 to 18414, Supplement (November 18, 2011) Page: 17,733
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and auction process.
180. Transition to New Support Levels. Support under CAF Phase II will be phased in, in the
following manner. For a carrier accepting the state-wide commitment, in the first year, the carrier will
receive one-half the full amount the carrier will receive under CAF Phase II and one-half the amount the
carrier received under CAF Phase I for the previous year (which would be the frozen amount if the carrier
declines Phase I or the frozen amount plus the incremental amount if the carrier accepts Phase I); in the
second year, each carrier accepting the state-wide commitment will receive the full CAF Phase II
amount.294 For a carrier declining the state-wide commitment, the carrier will continue to receive support
in an amount equal to its CAF Phase I support amount until the first month that the winner of any
competitive process receives support under CAF Phase II; at that time, the carrier declining the state-wide
commitment will cease to receive high-cost universal service support. No additional broadband
obligations apply to funds received during the transition period. That is, carriers accepting the state-wide
commitment are obliged to meet the Phase II broadband obligations described above, while carriers
declining the state-wide commitment will be required to meet their pre-existing Phase I obligations, but
will not be required to deploy additional broadband in connection with their receipt of transitional
funding.
d. Forward-Looking Cost Model
181. Background. In the USF Reform NOI/NPRM, the Commission sought comment
generally on whether we should develop a nationwide broadband model, and what type of model, to help
determine support levels in areas where there is no private sector business case to provide broadband and
voice services.295 In the USF/ICC Transformation NPRM, we proposed that the Commission use a green-
field, "scorched node" approach in developing a broadband cost model, rather than a brown-field
approach that assumes the existence of a last-mile copper network.296 We also noted that "[o]ver the
lifetime of a network, the cost of a fiber-to-the-premises (FTTP) and short-loop (12,000-foot) DSL
network may be basically equal, meaning that green-field costs are equivalent to those for a FTTP
deployment."297 In the August 3 Public Notice, the Bureau sought further comment on specific proposals
for reform that would use a forward-looking cost model to determine support, including the State
Members' Plan, and the ABC Plan.298
294 To the extent a carrier will receive less money from CAF Phase II than it will receive under frozen high-cost
support, there will be an appropriate multi-year transition to the lower amount. It is premature to specify the length
of that transition now, before the cost model is adopted, but it will be addressed in conjunction with finalization of
the cost model that will be developed with public input.
295 Connect America Fund, WC Docket No. 10-90, A National Broadband Plan for Our Future, GN Docket No. 09-
51, Iligh-Cost Universal Service Support, WC Docket No. 05-337, Notice of Inquiry and Notice of Proposed
Rulemaking, 25 FCC Rcd 6657, 6665-6673, paras. 14-40 (2010) (USF Reform NOI/NPRM). Specifically, the
Commission sought comment on whether we should develop a new model, rather than updating the Commission's
existing model; whether the model should estimate total costs or incremental costs; and whether the model should
estimate revenues as well as costs. Id. at 6669-73, paras. 31-40.
296 See USF/ICC Transformation NPRM, 26 FCC Red at 4687, paras. 437-38.
297 Id. at 4684, para. 436 & n.617 (citing OBI Technical Paper No. 1). This observation was based on Commission
staff analysis of the model used to create the National Broadband Plan. See id. at 4684, para. 436 n.617. We also
sought more focused comment on developing a total cost model, rather than an incremental cost model, and on the
difficulties in accurately estimating and modeling revenues. Id. at 4687, paras. 438-39.
298 Further Inquiry into Certain Issues in the Universal Service-Intercarrier Compensation Transforrmation
Proceeding, WC Docket Nos. 10-90, 07-135, 05-337, 03-109, CC Docket Nos. 01-92, 96-45, GN Docket No. 09-51,
(continued...)17733
Federal Communications Commission
FCC 11-161
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United States. Federal Communications Commission. FCC Record, Volume 26, No. 22, Pages 17663 to 18414, Supplement (November 18, 2011), book, 2011; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc154713/m1/81/: accessed April 24, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.