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Release of CAM v.3.1.3 Illustrative Results and Model Methodology

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Released: June 17, 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 13-1394

Released: June 17, 2013

WIRELINE COMPETITION BUREAU RELEASES ILLUSTRATIVE RESULTS

FROM CONNECT AMERICA COST MODEL VERSION 3.1.3, AND METHODOLOGY

DOCUMENTATION FOR VERSION 3.1.3

WC Docket No. 10-90

On June 7, 2013, the Wireline Competition Bureau (Bureau) announced the release of version
3.1.3 of the Connect America Cost Model (CAM v.3.1.3).1 Today, as part of its continuing open,
transparent, and deliberative process to adopt a cost model for Phase II of the Connect America Fund,2 the
Bureau announces the release of illustrative model outputs from running CAM v.3.1.3 using different
combinations of possible model inputs and support assumptions. 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-illustrative-results. The Bureau also
announces the release of updated methodology documentation for CAM v3.1.3, to assist the public in
understanding the current model architecture, processing steps, and data sources.3 The methodology
documentation is available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-321626A1.pdf.


1 See Wireline Competition Bureau Announces Availability of Version 3.1.3 of the Connect America Fund Phase II
Cost Model
, WC Docket No. 10-90, Public Notice, DA 13-1340 (Wireline Comp. Bur. rel. June 7, 2013). Version
3.1.3 of the Connect America Cost Model builds on version 3.1.2 by removing subsidized providers from the
model's source data used to calculate which census blocks presumptively will receive funding from the defined
budget, and updating the "OCNCoSize" input table to adjust records where an operating company number was
categorized inconsistently with other members of the same holding company.
2 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.
3 The methodology documentation has been, and will continue to be, revised to reflect any changes made in the
Connect America Cost Model. This documentation replaces the version 3.1.2 methodology documentation that was
posted recently. See Wireline Competition Bureau Releases Illustrative Results from Connect America Cost Model
Version 3.1.2, and Methodology Documentation
, WC Docket No. 10-90, DA 13-1305 (Wireline Comp. Bur. rel.
June 4, 2013) (CAM v.3.1.2 Illustrative Results PN).

The Bureau has sought comment in the virtual workshop on adopting the input values currently in
CAM v.3.1.3 and on setting the appropriate thresholds that will determine which census blocks lacking an
unsubsidized competitor are funded. 4 CAM v.3.1.3 can be run using different combinations of input
values and thresholds. Like the results we released for CAM v.3.1.2,5 the model results that we publish
today for CAM v.3.1.3 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.6 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.
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.8 Numerous interested parties have executed the attachments to the
protective order and have had full access to each version of the model, enabling them to run their own
customized reports.
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 email 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 June 17, 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 June 17, 2013).
5 See CAM v.3.1.2 Illustrative Results PN.
6 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).
7 WCB Cost Model Virtual Workshop 2012, http://www.fcc.gov/blog/wcb-cost-model-virtual-workshop-2012 (last
visited June 17, 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).
8 See Connect America Fund, WC Docket No. 10-90, Third Supplemental Protective Order, 27 FCC Rcd 15277
(Wireline Comp. Bur. 2012).
2

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