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Release of CAM v3.1.2 Illustrative Results and Model Methodology

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Released: June 4, 2013

PUBLIC NOTICE

Federal Communications Commission
445 12th St., S.W.

News Media Information 202 / 418-0500

Internet: http://www.fcc.gov

Washington, D.C. 20554

TTY: 1-888-835-5322

DA 13-1305

Released: June 4, 2013

WIRELINE COMPETITION BUREAU RELEASES ILLUSTRATIVE RESULTS

FROM CONNECT AMERICA COST MODEL VERSION 3.1.2,

AND METHODOLOGY DOCUMENTATION

WC Docket No. 10-90

Today, as part of its open, transparent, and deliberative process to adopt a cost model for Phase II
of the Connect America Fund,1 the Wireline Competition Bureau (Bureau) announces the release of
illustrative model outputs from running the Connect America Cost Model version 3.1.2 (CAM v.3.1.2)
using different combinations of possible model inputs and support assumptions.2 The reports show
potential support amounts and number of supported locations, by carrier, by state. The reports are
available at http://www.fcc.gov/encyclopedia/connect-america-cost-model-version-312-illustrative-
results. The Bureau also announces the release of model methodology documentation for CAM v.3.1.2 to
assist the public in understanding the current model architecture, processing steps, and data sources.3 The
methodology documentation is available at
http://transition.fcc.gov/Daily_Releases/Daily_Business/2013/db0531/DOC-321341A1.pdf
The Bureau has sought comment in the virtual workshop on adopting the input values currently in
CAM v.3.1.2 and on setting the appropriate thresholds that will determine which census blocks lacking an

1 Connect America Fund Phase II will provide ongoing support for voice services and the extension of broadband-
capable networks to millions of unserved locations using “a combination of a forward-looking cost model and
competitive bidding.” See Connect America Fund et al., WC Docket No. 10-90 et al., Report and Order and Further
Notice of Proposed Rulemaking, 26 FCC Rcd 17663, 17673, para. 23 (2011) (USF/ICC Transformation Order),
pets. for review pending sub nom. In re: FCC, No. 11-9900 (10th Cir. filed Dec. 8, 2011). The Commission
delegated to the Bureau the task of selecting a specific engineering cost model and associated inputs, consistent with
the parameters set forth in the USF/ICC Transformation Order, to determine support amounts to be offered to price
cap carriers that make a state-level commitment. See USF/ICC Transformation Order, 26 FCC Rcd at 17735, para.
187.
2 See Wireline Competition Bureau Announces Availability of Version 3.1.2 of the Connect America Fund Phase II
Cost Model and Adds Additional Discussion Topics to Connect America Cost Model Virtual Workshop
, WC Docket
No. 10-90, Public Notice, DA 13-1136 (Wireline Comp. Bur. rel. May 17, 2013) (Version 3.1.2 Announcement PN).
See also Letter from Charles A. Acquard, Executive Director, National Association of State Utility Consumer
Advocates, to Marlene H. Dortch, Secretary, Federal Communications Commission, WC Docket Nos. 10-90, 05-337
(filed May 9, 2013) (noting the importance of model outputs being available to the public).
3 The methodology documentation has been, and will continue to be, revised as work progresses on the Connect
America Cost Model.

unsubsidized competitor are funded. 4 CAM v.3.1.2 can be run using different combinations of input
values and thresholds. The model results that we publish today illustrate a range of outcomes for support
amounts by carrier per state, depending on final decisions on a number of issues, including values for the
lower “funding threshold” and the upper “extremely high-cost threshold” that will determine which
census blocks are eligible for Connect America Phase II support, and values for the cost of money that
will be used in the model’s annual charge factors to capture the annual cost of capital investments. The
reports also indicate the number of locations eligible for support per state for each of those runs. For each
combination, the reports also show the total support amounts and number of eligible locations under two
alternative scenarios: (1) all carriers that serve non-contiguous states and territories have their support
frozen at 2011 levels; and (2) all such carriers receive model-based support.5
In order to access any version of the model, parties must execute the relevant acknowledgement
of confidentiality, licensing, and nondisclosure documents released as attachments to a Third
Supplemental Protective Order.6 Numerous interested parties have executed the protective order and have
had full access to each version of the model, enabling them to run their own customized reports. The
Bureau has not yet finalized and adopted a cost model, and is still seeking public input on a number of
issues.7 Accordingly, the results that we release today are not final support amounts. When the Bureau
does adopt a cost model, we expect to release a public notice indicating the support amounts to be offered
to each price cap carrier for each state, as calculated by the final version of the model.
We anticipate that the Bureau will continue to release illustrative reports of model results as work
on the model progresses in the weeks ahead, including study area level reports. We encourage the public
to contact Bureau staff if they would like other types of reports to be published.
For further information, please contact Katie King at (202) 418-1500 or via e-mail at
Katie.King@fcc.gov, or Heidi Lankau at (202) 418-2876 or via email at Heidi.Lankau@fcc.gov.
- FCC -

4 See “Support Thresholds,” WCB Cost Model Virtual Workshop 2012, http://www.fcc.gov/blog/wcb-cost-model-
virtual-workshop-2012-support-thresholds (last visited May 30, 2013); “Rate of Return for Connect America Cost
Model,” WCB Cost Model Virtual Workshop 2012, http://www.fcc.gov/blog/wcb-cost-model-virtual-workshop-
2012-rate-return-connect-america-cost-model (last visited May 30, 2013).
5 See Wireline Competition Bureau Seeks Comment on Connect America Phase II Support for Price Cap Areas
Outside of the Contiguous United States
, WC Docket No. 10-90, Public Notice, 28 FCC Rcd 1030 (Wireline Comp.
Bur. 2013).
6 See Connect America Fund, WC Docket No. 10-90, Third Supplemental Protective Order, 27 FCC Rcd 15277
(Wireline Comp. Bur. 2012).
7 WCB Cost Model Virtual Workshop 2012, http://www.fcc.gov/blog/wcb-cost-model-virtual-workshop-2012 (last
visited May 30, 2013). The Bureau released an order adopting key engineering assumptions for the Connect
America Cost Model earlier this year. See Connect America Fund; High-Cost Universal Service Support, WC
Docket Nos. 10-90, 05-337, Report and Order, 28 FCC Rcd 5301 (Wireline Comp. Bur. 2013).
2

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