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by: Wireline Competition Bureau

October 1, 2012

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.

Hybrid Cost Proxy Model: The HCPM is a voice-based model. The model assumes a maximum loop length of 18,000 feet. The Commission decided at the time not to accommodate high-bandwidth advanced services by adopting a short loop length; the Commission concluded it did not make sense to burden the Universal Service Fund with the cost of delivering advanced services, i.e. broadband, when only a small portion of customers subscribed to such services. The Commission initially concluded that the model should be capable of separately identifying host, remote, and stand-alone switches and of distributing the savings associated with lower-cost remote switches among all lines in a given host-remote relationship. The Commission later decided, after no party had submitted an algorithm that could determine whether a wire center should house a particular type of switch, that use of the Local Exchange Routing Guide (LERG) was the most feasible alternative currently available to incorporate the efficiencies of host-remote relationships in the federal high-cost universal support mechanism. The HCPM also provides for the 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 and explicitly models the cost of signaling.

The CQBAT model does not explicitly model the cost of voice.

Questions for Comment

Because voice telephony service is the supported service, the model must calculate the cost of a network that can provide voice. The Bureau seeks comment on the following proposals:

  1. If we adopt a green-field model, the Bureau proposes to calculate the cost of voice telephony service with the following:
    • One softswitch per market
      • How should we define the market? One softswitch per state?
      • Should we model this as a fixed cost, or a fixed cost and some variable or wholly variable?
    • Some type of signaling system
      • What type of signaling system should the model use? (e.g., Signaling System 7 (SS7), Session Initiation Protocol (SIP))
    • Backup power
      • Should the model provide for backup power in the central offices?
      • Should the model provide for batteries in the customer premises equipment if using fiber-to-the-premises (FTTP)?
  2. If we adopt a brown-field model, the Bureau proposes that it would only need to capture the cost of operating and maintaining a network that can provide voice telephony service; it would not need to include any capex for a voice network. Would the most straightforward option be to calculate the total cost of providing voice as in a green-field case and remove the capex from the calculation?

Sources

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