FCC Record, Volume 26, No. 21, Pages 16758 to 17662, December 12 - December 30, 2011 Page: 16,838
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the model development process expeditiously, so that we can begin distributing model-based support in
January 2013. We understand it may not be practical to include all preferred capabilities in the final
model in the timeframe established by the Commission, but we will evaluate submissions based on the
capabilities they provide, in light of the model requirements set forth in the USF/ICC Transformation
Order andFNPRM. In particular, we describe the geographic requirements (paragraph 6), the model
capabilities to ensure the model is forward-looking and economically efficient (paragraphs 7-9), the types
of cost that the model should calculate (paragraph 10), and other capabilities (paragraph 11). There will
be one or more public notices seeking comment on specific issues that must be resolved before we adopt a
final model.
6. Consistent with the Commission's order, the adopted model should be capable of
estimating the forward-looking economic costs of an efficient wireline provider at a granular level--
census block or smaller-in all areas of the country, including Alaska, Hawaii, Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, and Northern Marianas Islands.9 These granular cost estimates
should capture the effects of scale and low utilization rates on costs. Thus, for example, models should
take into account that in less densely populated areas the cost of shared facilities is spread over fewer
locations, driving up the cost per location. In addition, it may be appropriate to estimate higher per-unit
costs for small providers, or to reflect savings on costs such as overhead for large providers to reflect
economies of scale. Models must also be capable of excluding areas served by unsubsidized competitors.
Because available data will likely change between the deadline for filing models and the time a model is
adopted and support levels are set, models should be able to incorporate changes to underlying data
sources.
7. The Commission directed the Bureau "to ensure that the model design maximizes the
number of locations that will receive robust, scalable broadband within the budgeted amounts."'0 The
Commission also delegated to the Bureau the choice of a greenfield or brownfield broadband model."
To meet these objectives and evaluate alternative policy choices, models should be capable of estimating
the costs of both brownfield'2 and greenfield builds13 for multiple wireline technologies. In particular,
models should be capable of estimating the costs of fiber-to-the-premises (FTTP) and digital subscriber
9 See USF/ICC Transformation Order and FNPRM, at paras. 187-89, 193.
1o USF/ICC Transformation Order and FNPRM, at para. 187.
" See id.
'Z A brownfield approach would assume the existence of a last-mile copper network.
13 Two different types of wireline cost models are often referred to as greenfield models: A "scorched node" model
is one that models the network using the existing LEC wire centers. In contrast, a "scorched earth" model assumes
no existing infrastructure. We expect that if we adopt a greenfield model in the current proceeding, a scorched node
model that takes the location of central offices as fixed is likely to be more appropriate than the scorched earth
alternative, given the five-year time period of funding under CAF Phase II. We expect there may be circumstances
in some geographic areas, however, such as lack of data on the location of incumbent LEC nodes, in which a
scorched earth approach may be necessary.16838
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United States. Federal Communications Commission. FCC Record, Volume 26, No. 21, Pages 16758 to 17662, December 12 - December 30, 2011, book, December 2011; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc86675/m1/95/: accessed April 25, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.