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Blog Posts by Wireline Competition Bureau

WCB Cost Model Virtual Workshop 2012 - Inter-Office Transport Cost

October 1, 2012 - 05:00 PM

Please provide comments to the issue below as part of the 2012 WCB cost model virtual workshop for inclusion in the record. Comments are moderated for conformity to the workshop’s guidelines.

Background

Hybrid Cost Proxy Model: The HCPM sizes inter-office transport based on voice connections. The model assumes the use of state-of-the-art SONET rings. The Commission concluded there should be an allocation of a reasonable portion of the joint and common costs of the switching and inter-office functions to the cost of providing the supported services, i.e., voice telephony. Moreover, the model uses the Local Exchange Routing Guide (LERG) database to determine host-remote relationships.

CQBAT: The CQBAT model uses a tandem switch—central office switch relationship to determine which central offices tie to which aggregation points. This information comes from the LERG database. The model assumes Ethernet-based fiber connections among wire centers and between wire centers and tandem switches, including the use of reconfigurable optical add-drop multiplexers (ROADMs) and wave division multiplexing (WDM) gateways. Additionally, the model connects each hierarchy to the nearest (lowest cost) Internet access point regardless of ownership. The CQBAT model also uses routing along roads to determine the cost of deploying fiber to make connections, and includes Broadband Remote Access Servers (BRAS) and/or gateway costs.

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WCB Cost Model Virtual Workshop 2012 - Voice Capability

October 1, 2012 - 05:00 PM

Please provide comments to the issue below as part of the 2012 WCB cost model virtual workshop for inclusion in the record. Comments are moderated for conformity to the workshop’s guidelines.

Background

USF/ICC Transformation Order: The Commission determined that "voice telephony service" is the service supported by federal high-cost universal service support. All recipients must offer voice telephony service. In addition, as a condition of receiving support, all recipients must offer broadband service.

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WCB Cost Model Virtual Workshop 2012 - Wire Center Facilities

October 1, 2012 - 05:00 PM

Please provide comments to the issue below as part of the 2012 WCB cost model virtual workshop for inclusion in the record. Comments are moderated for conformity to the workshop’s guidelines.

Background

The Bureau believes most of the hardware necessary in each wire center is captured by the requirements for voice or inter-office transport.

Hybrid Cost Proxy Model: The HCPM envisions a network that requires a circuit switch for voice calls, digital loop carriers (DLCs), and serving area interfaces (SAIs). The HCPM also includes the costs associated with the main distribution frame (MDF), the purchase and installation of power equipment costs, and appropriate engineering costs.

CQBAT: The CQBAT model includes costs for an all-IP network, including routers, Ethernet switches, and rack space, in addition to costs for buildings, land, and power. For fiber-to-the-premises (FTTP) configurations, the cost of optical line terminators (OLTs) is also included.

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WCB Cost Model Virtual Workshop 2012 - Sizing of Network Facilities

October 1, 2012 - 05:00 PM

Please provide comments to the issue below as part of the 2012 WCB cost model virtual workshop for inclusion in the record. Comments are moderated for conformity to the workshop’s guidelines.

Background

Hybrid Cost Proxy Model: The HCPM is built for a narrow-band network. Network sizing in the HCPM is a matter of ensuring sufficient capacity to handle voice calls and provide appropriate levels of call blocking (e.g., using an Erlang model, which is used in telephony as a measure of offered load or carried load on service-providing elements such as telephone circuits or telephone switching equipment).

CQBAT: The CQBAT model sizes the network according to the digital throughput required at the time of peak usage based on a busy-hour offered load. This method is basically the same approach that was taken in the National Broadband Plan modeling.

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WCB Cost Model Virtual Workshop 2012 - The Use of Company-Specific Values

October 1, 2012 - 05:00 PM

Please provide comments to the issue below as part of the 2012 WCB cost model virtual workshop for inclusion in the record. Comments are moderated for conformity to the workshop’s guidelines.

Background

Hybrid Cost Proxy Model: The Commission determined that nationwide default values were generally more appropriate than company-specific values. Accordingly, the HCPM uses nationwide average values for estimating plant-specific operations expenses. The Commission found that averages, rather than company-specific data, are better predictors of the forward-looking costs that should be supported by the federal high-cost mechanism. The Commission also determined that the use of nationwide averages would reward efficient companies and provide the proper incentives to inefficient companies to become more efficient over time, and that this reward system would drive the national average toward the cost that the competitive firm could achieve.

CQBAT: While the CQBAT model also does not use company-specific values to predict forward-looking costs, it does use regional cost adjustment factors to capture variation in labor and materials costs by three-digit ZIP codes.

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WCB Cost Model Virtual Workshop 2012 - Determining the Annualized Cost of Capital Investments

October 1, 2012 - 05:00 PM

Please provide comments to the issue below as part of the 2012 WCB cost model virtual workshop for inclusion in the record. Comments are moderated for conformity to the workshop’s guidelines.

Background

Hybrid Cost Proxy Model: The HCPM adopts a straight line equal-life-group method of depreciation, using Gomerpertz-Makeham curves. These standard curves describe generalized mortality patterns and are used to determine the probable frequency of plant mortality. To estimate depreciation expenses, the HCPM uses the projected lives and future net salvage percentages for the asset accounts in Part 32 of the Commission's rules. The HCPM also selects a particular set of Annual Charge Factors (ACFs) based on a methodology that is user adjustable and reflects the sum for the three inputs: depreciation, cost of capital, and maintenance costs.

CQBAT: The CQBAT model uses the same approach as the HCPM. It adopts a straight-line equal-life-group method with expected mortality curves. The lifetimes are also set by the HCPM's values. The Bureau notes that the CQBAT model as submitted in the record does not make public the calculations used to set particular input values in the event a lifetime changes.

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WCB Cost Model Virtual Workshop 2012 - Community Anchor Institutions

June 1, 2012 - 05:00 PM

Please provide comments to the issue below as part of the 2012 WCB cost model virtual workshop for inclusion in the record. Comments are moderated for conformity to the workshop's guidelines.

Background

The Commission has a statutory obligation to ensure that schools, libraries, and health care providers have access to advanced telecommunications and information services. In the USF/ICC Transformation Order, the Commission established a performance goal of ensuring "universal availability of modern networks capable of delivering broadband and voice services . . . to community anchor institutions." Community anchor institutions are defined by the Order to include such entities as schools, libraries, hospitals and other medical providers, public safety entities, institutions of higher education, and community support organizations that facilitate greater use of broadband by vulnerable populations, including low-income, the unemployed, and the aged.

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WCB Cost Model Virtual Workshop 2012 - Business Locations

June 1, 2012 - 05:00 PM

Please provide comments to the issue below as part of the 2012 WCB cost model virtual workshop for inclusion in the record. Comments are moderated for conformity to the workshop's guidelines.

Background

Hybrid Cost Proxy Model: The Hybrid Cost Proxy Model (HCPM) used carrier-submitted line count data to determine the number of switched business lines and special access lines in a wire center and assumed a certain percentage were provided using a DS1. A DS1 provides 24 voice equivalent channels (DS0s) using two copper pairs. These percentages were then used to reduce the number of DS0 lines deployed by the model in each wire center to account for the DS1s that were deployed to serve business locations and special access locations. Although the costs of special access services were included in the total cost of each wire center, and costs were unitized by both switched access and non-switched access lines, support was only provided to locations served by switched access lines (including business locations).

Connect America Cost Model: In the USF/ICC Transformation Order, the Commission established a performance goal of ensuring "the universal availability of modern networks capable of delivering broadband and voice service to homes, businesses, and community anchor institutions."

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