WCB seeks comment on options to promote rural broadband
Federal Communications Commission
445 12th St., S.W.
News Media Information 202 / 418-0500
Washington, D.C. 20554
Released: May 16, 2013
WIRELINE COMPETITION BUREAU SEEKS COMMENT ON OPTIONS TO PROMOTE
RURAL BROADBAND IN RATE-OF-RETURN AREAS
WC Docket No. 10-90
Comments Due: June 17, 2013
Reply Comments Due: July 15, 2013
By this Public Notice, the Wireline Competition Bureau (Bureau) seeks comment on
options to promote the availability of modern voice and broadband-capable networks in rural areas served
by rate-of-return carriers. In particular, we seek comment on two possible frameworks that could provide
rate-of-return carriers with additional incentives to efficiently advance broadband deployment. First, rate-
of-return carriers have urged the Commission to take steps to make universal service fund support
available to support broadband lines even where their consumers choose not to purchase voice telephony
service.1 To that end, we seek additional targeted comment on several aspects of a proposal made by the
rural carrier associations regarding changes to the existing framework set forth in the Commission’s rules
to make support available for network infrastructure that provides standalone broadband service. Second,
we seek comment on facilitating rate-of-return carriers’ voluntary participation in Connect America Phase
II. Connect America Phase II will feature clearly defined support amounts for a defined period of time
along with specific service deployment obligations. Certain rate-of-return carriers may find advantages
to participating in Connect America Phase II and seek to opt in to this support mechanism. Recognizing
that rate of return carriers already have the option of voluntary conversion to price cap regulation, we seek
1 See Comments of NECA, NTCA, OPASTCO, and WTA, WC Docket No. 10-90 et al. at 32-36 (filed April 18,
2011) (Rural Association Plan); see also Petition of the National Telecommunications Cooperative Association for a
Rulemaking to Promote and Sustain the Ongoing TDM-to-IP Evolution, GN Docket No. 12-353 at 15, (filed Nov.
19, 2012); Letter from Michael R. Romano, Senior Vice President – Policy, National Telecommunications
Cooperative Association, to Ms. Marlene H. Dortch, Secretary, FCC, WC Docket No. 10-90 et al (filed Jan. 28,
2013) (January 28 Ex Parte); Letter from Michael R. Romano, Senior Vice President – Policy, National
Telecommunications Cooperative Association, to Ms. Marlene H. Dortch, Secretary, FCC, WC Docket No. 10-90 et
al (filed Feb. 22, 2013) (February 22 Ex Parte); Letter from Michael R. Romano, Senior Vice President – Policy,
National Telecommunications Cooperative Association, to Ms. Marlene H. Dortch, Secretary, FCC, WC Docket No.
10-90 et al (filed Apr. 1, 2013) (April 1 Ex Parte); Letter from Michael R. Romano, Senior Vice President – Policy,
National Telecommunications Cooperative Association, to Ms. Marlene H. Dortch, Secretary, FCC, WC Docket No.
10-90 et al (filed Apr. 25, 2013) (April 25 Ex Parte); Comments of the National Exchange Carrier Association, Inc.;
National Telecommunications Cooperative Association; Organization for the Promotion and Advancement of Small
Telecommunications Companies; and the Western Telecommunications Alliance, WC Docket No 10-90 et al, at 32
(filed Jan. 18, 2012) (Rural Associations Comments).
comment what steps we could take to facilitate such conversions and other issues related to the provision
of Connect America Fund Phase II support to rate-of-return carriers.
Rural Association Proposal for Standalone Broadband Lines2.
The rural carrier associations have advocated for a “Connect America Fund that supports
broadband-capable networks that enable advanced communications and enhanced consumer choice in all
rural areas.”2 Of course, as the rural carrier associations have acknowledged in other contexts, existing
universal service support for rate-of-return carriers supports such networks,3 and indeed, under the
USF/ICC Transformation Order, carriers are required to deploy broadband-capable infrastructure as a
condition of receiving such support. 4 The rural carrier associations have noted that “[t]he Order adopts a
number of broadband-related public interest obligations for ETCs, including RLECs[,] . . . [including a]
requirement that RLECs offer broadband services meeting minimum speed and latency requirements
upon ‘reasonable request’.”5 The rural carrier associations suggest that the Commission should provide
high-cost support for standalone broadband loops provided by rate-of-return carriers to further advance
Today, a rate-of-return carrier may provide broadband transmission in one of two ways:
over a loop that provides both voice and broadband, or over a standalone broadband transmission loop.
However, universal service support—in the form of High-Cost Loop Support (“HCLS”) and Interstate
Common Line Support (“ICLS”)—is available for a broadband-capable loop provided by a rate-of-return
carrier only if the end user customer purchases voice service. When the loop is used to deliver both voice
and broadband transmission services on a Title II basis, the loop is considered a “joint use” loop.7 Under
2 April 1 Ex Parte at 3 (emphasis omitted).
3 See e.g., Rural Associations Comments at 28.
4 See Connect America Fund; A National Broadband Plan for Our Future; Establishing Just and Reasonable Rates
for Local Exchange Carriers; High-Cost Universal Service Support; Developing a Unified Intercarrier
Compensation Regime; Federal-State Joint Board on Universal Service; Lifeline and Link-Up; Universal Service
Reform—Mobility Fund; WC Docket Nos. 10-90, 07-135, 05-337, 03-109, CC Docket Nos. 01-92, 96-45, GN
Docket No. 09-51, WT Docket No. 10-208, Report and Order and Further Notice of Proposed Rulemaking, 26
FCC17663, 17740, para. 206 (2011) (USF/ICC Transformation Order and/or FNPRM); pets. for review pending sub
nom. In re: FCC 11-161, No. 11-9900 (10th Cir. filed Dec. 8, 2011).
5 Rural Associations Comments at 28.
6 See April 1 Ex Parte at 3.
7 Typically the rate-of-return carrier sells the broadband transmission service to an affiliated Internet service
provider, which in turn sells retail broadband Internet access to the end user. Broadband Internet access service is
“[a] mass-market retail service by wire or radio that provides the capability to transmit data to and receive data from
all or substantially all Internet endpoints, including any capabilities that are incidental to and enable the operation of
the communications service, but excluding dial-up Internet access service. This term also encompasses any service
that the Commission finds to be providing a functional equivalent of the service described in the previous sentence,
or that is used to evade the protections set forth in this part.” 47 C.F.R. § 8.11(a). The services at issue here provide
the “transmission component” of broadband Internet access service. See Appropriate Framework for Broadband
Access to the Internet over Wireline Facilities; Universal Service Obligations of Broadband Providers; Review of
Regulatory Requirements for Incumbent LEC broadband Telecommunications Services; Computer III Further
Remand Proceedings: Bell Operating Company Provision of Enhanced Services; 1998 Biennial Regulatory Review
– Review of Computer III and ONA Safeguards and Requirements; Conditional Petition of the Verizon Telephone
Companies for Forbearance Under 47 U.S.C. § 160(c) with Regard to Broadband Services Provided Via Fiber to
the Premises; Petition of the Verizon Telephone Companies for Declaratory Ruling or, Alternatively, for Interim
Waiver with Regard to Broadband Services Provided Via Fiber to the Premises; Consumer Protection in the
current Commission rules, the costs of that loop are considered regulated costs, with most of those costs
allocated to the intrastate jurisdiction.8 HCLS and ICLS provide support for interstate and intrastate loop
costs.9 In contrast, if the loop only is used to deliver Title II broadband transmission service, and not
voice, all of the costs associated with that loop are jurisdictionally interstate and are allocated to special
access, and the underlying broadband transmission is tariffed as special access.10 There is no universal
service support mechanism for costs associated with special access provided by rate-of-return carriers.
The rural carrier associations contend this lack of support for standalone broadband transmission service
in high cost areas contributes to a significant variance in the rates consumers pay for broadband bundled
with voice service compared to standalone broadband.11
The Commission originally sought comment on this proposal in the USF/ICC
Transformation Order FNPRM, where it inquired about the legal and policy implications to providing
USF support for lines where the end user customer does not subscribe to voice service from the eligible
telecommunications carrier (ETC), including the monetary impact on the Connect America Fund if the
Commission were to provide support for standalone broadband provided by rate-of-return carriers.12 The
Commission also inquired about what rule changes would help provide appropriate incentives for
investment in broadband-capable networks, while limiting unrestrained growth in support provided to
Since that time, the rural associations have made additional filings regarding this matter,
arguing, among other things, that providing support for standalone broadband would promote broadband
adoption and competition in voice services.14 First, the rural associations suggest that the Commission
should “consider technical fixes to its rules that would permit loop costs to remain in the Common Line
pool (and thus eligible for USF cost recovery) even where a consumer declines to take an offer of voice
telephony and instead elects only to take broadband service from an RLEC.”15 The rural associations
argue that “[s]uch simple Part 69 rule changes are needed to fulfill the express and plainly stated intent of
Broadband Era, CC Docket Nos. 02-33, 01-337, 95-20, 98-10, WC Docket Nos. 04-242, 05-271, 20 FCC Rcd
14853, 14909-10, paras. 102-03 (2005) (subsequent history omitted).
8 See 47 C.F.R. §§ 36.621 and 54.901.
9 The costs of a loop are only recovered once under the Commission’s cost allocation and pricing procedures. Loop
costs associated with joint-use facilities are allocated between the state and federal jurisdictions on a 75/25 percent
basis. These joint-use loops may receive HCLS and ICLS. The costs of these joint-use facilities, therefore, are
recovered through a combination of intrastate end user charges for voice service, interstate charges (such as the
subscriber line charge) and universal service support. Typically, the only costs recovered through the special access
tariff for the broadband transmission service are the incremental costs associated with making the loop broadband-
10 Broadly speaking, 100 percent of line costs associated with special access services are directly assigned to either
the interstate or intrastate jurisdiction, dependent on the jurisdictional usage of the line. Special access costs (loop
and other incremental costs) are recovered in the appropriate jurisdiction through tariffed rates for the involved
services without the benefit of any universal service support. See generally 47 C.F.R. Parts 36 and 69.
11 See National Exchange Carrier Association Inc., Transmittal No. 1369, Tariff F.C.C. No. 5, Description and
Justification, at Ex. 3 (filed Dec. 17, 2012). For instance, the NECA tariffed rate for the underlying broadband
transmission for a voice/data 3 Mbps/15 Mbps line is $19.61, while the rate for the underlying broadband
transmission for a data only 3 Mbps/15 Mbps line is $72.51.
12 See USF/ICC Transformation FNPRM, 26 FCC Rcd at 18049, para. 1036.
13 See id.
14 See, e.g., January 28 Ex Parte at 3.
15 January 28 Ex Parte at 3.
the Commission’s reform order, and . . . allow consumers in rural areas to have the same choices as those
in urban areas with respect to their communications services.”16 What specific Part 69 rule changes
would be required? Are any other rule changes necessary? What is the near-term impact to the HCLS
and ICLS mechanisms? Would making these modifications to the Commission’s rules change the HCLS
allocation among carriers? Would such changes increase ICLS support?
We also invite interested parties to comment on several issues related to establishing
separate loop categories to account for joint-use lines and standalone broadband lines. First, we invite
parties to comment on whether there are definitional issues relating to Part 69 implementation that would
need to be addressed to define rate elements necessary to offer standalone broadband service. Parties
should address whether a loop element and a port element structure similar to the structure currently used
for joint-use loops should be used and, if so, how different speeds should be handled within the rate
structure. For example, can speed differences be addressed through a circuit equipment/port charge while
having a line rate that is uniform for all speeds? Parties should also address whether the Commission
should create classes of standalone broadband, with the costs of certain standalone broadband
transmission services remaining in the Common Line pool, while the costs associated with other
broadband transmission services would not. If the Commission were to do so, how should it define the
characteristics of the different classes? For example, should the Commission maintain a class of special
access broadband transmission? As noted above, standalone broadband service is currently in the special
access category. And, carriers have had significant flexibility in establishing special access rates. The
pricing principles for the new loop Common Line service must be clear to avoid potential misuse, such as
supporting special access services. We invite parties to comment on the need for cost allocation
procedures to be used to establish the price of a standalone broadband loop offering. Commenters should
address procedures for allocating direct, indirect, and overhead costs. Commenters should also discuss
any revisions to the Commission’s rules required to implement any cost allocation procedures.
Second, the rural associations suggest that “[w]hile some of these issues require further
analysis” a standalone broadband funding mechanism is ultimately necessary to “ensure that broadband is
available at affordable, reasonably comparable rates for consumers in high-cost areas.”17 We seek
comment on how such a mechanism would impact providers’ investment plans and service offerings, as
well as consumer choices and rates. We invite commenters to provide data on the specific percentages of
residential end users that currently purchase retail broadband Internet access without landline service in
rural areas served by rate-of-return carriers and in rural areas served by price cap carriers. We also invite
comment on how a standalone broadband funding mechanism could be structured. If implemented, how
would a transition to such a mechanism work, and would there be an impact on the total amount of
support received by rate-of-return carriers? How would such a mechanism be implemented within the
overall high-cost Connect America Fund framework, which established a budget of “up to $2 billion”
annually for rate-of-return territories, including intercarrier compensation recovery?18 Would it make
sense to limit support provided through such a mechanism, or to adopt such a mechanism in conjunction
with overall limits on support?
16 Id. See also Rural Associations Comments at 32.
17 January 28 Ex Parte at 3.
18 USF/ICC Transformation Order, 26 FCC Rcd at 17711, para. 126. We note that in 2012, rate-of-return carriers
collectively received approximately $2 billion in support, including recovery associated with intercarrier
compensation reform, so that any change that served to increase their ICLS draw would likely result in them
receiving in excess of $2 billion annually.
Voluntary Election of Connect America Phase II Model-Based Support8.
Facilitating a path for carriers to opt in to Connect America Phase II, including through
the existing process to convert to price cap regulation, is consistent with the Commission’s longstanding
goal of providing support to all carriers through incentive-based mechanisms.19 We seek comment on
whether creating a more explicit voluntary pathway to model-based support would be an additional way
to promote efficient new broadband deployment in rural rate-of-return areas.20
In the USF/ICC Transformation Order, the Commission adopted the framework for the
Connect America Fund Phase II, which will provide support in areas served by price cap carriers.21 While
price cap conversion is generally available to carriers, the Commission did not specifically address the
circumstance in which a rate-of-return carrier that is not affiliated with a price cap holding company
would seek to participate in Connect America Phase II.22 The Commission decided that Phase II support
should be based on the forward-looking costs of deploying voice and broadband-capable networks in
high-cost areas, with support calculated at a granular area.23 The Commission delegated to the Bureau the
authority to develop a model and establish support thresholds.24 Based on the support amounts derived
from the model, the Commission will offer each price cap carrier, and any rate-of-return LEC affiliates of
a price cap carrier, annual support for the five-year period in exchange for a commitment to offer a
specified level of service within that service territory.25 For all territories for which price cap LECs
decline to make that commitment, the Commission will award ongoing support through a competitive
bidding mechanism.26 At the end of the five-year Connect America Fund Phase II period, the
Commission expects to distribute all Connect America Fund support in price cap areas pursuant to a
In adopting the framework for the Connect America Fund Phase II, the Commission did
not explicitly address how this model might be applied to determine support amounts in non-price cap
19 In the Matter of Federal State Joint Board on Universal Service, Report and Order, CC Docket 96-45, 12 FCC
Rcd 8776, 8889, para. 204 (1997).
20 See April 1 Ex Parte at 3.
21 USF/ICC Transformation Order, 26 FCC Rcd at 17725-38, paras. 156-93. The USF/ICC Transformation Order
states that Connect America Phase II support will be offered to “each price cap ETC” and sets a Connect America
budget of $1.8 billion for “areas currently served by price cap carriers.” USF/ICC Transformation Order, 26 FCC
Rcd at 17725, paras. 156, 158. The Commission notes that “[f]or the purposes of CAF Phase II, consistent with our
approach in CAF Phase I, we will treat as price cap carriers the rate-of-return operating companies that are affiliated
with holding companies for which the majority of access lines are regulated under price caps.” Id. at 17725, para.
22 Id. at 17738, 17740, para. 195, para. 204.
23 Id. at 17727, para. 166.
24 Id. at 17734-35, para. 184. The model will be used to identify census blocks for which the cost to serve is higher
than can be supported through end user revenues alone (the “funding threshold”) and also to identify extremely
high-cost census blocks that should instead receive funding set aside for remote areas to be served by alternative
technologies. Id. at 17728, para. 167.
25 Id. at 17727, para. 166. We note that one rate-of-return carrier (Surewest) has been acquired by a price-cap carrier
since adoption of the USF/ICC Transformation Order, and therefore will be receiving model-based support once the
cost model is implemented.
27 Id. at 17726-27, para. 163.
territories.28 We now seek to further develop the record on how Connect America Fund Phase II could be
provided in areas that currently are served by rate-of-return carriers to provide additional incentives for
deployment of broadband-capable networks.
We invite parties to comment on the advantages and disadvantages of this pathway, both
from the perspective of potential recipients of support and for achievement of the Commission’s overall
goals for reform. In particular, parties should address the extent to which rate-of-return carriers would
find it beneficial to receive Phase II support rather than the support provided by the current HCLS and
ICLS programs. Would individual carriers conclude the potential benefits of receiving a steady, model-
derived support amount for a multi-year period, combined with an incentive-based structure that allows
carriers to capture the benefits of efficiency, are sufficient to pursue this option? We seek comment on
how facilitating a transition for rate-of-return carriers to model-based support would impact providers’
investment plans and service offerings, as well as consumer choices and rates.
Timing. Nothing in the USF/ICC Transformation Order precludes current rate-of-return
carriers from electing to convert to price cap regulation in order to receive Connect America Phase II
model-based support. Given that significant progress has been made on Phase II implementation,29
however, it may be unlikely that a rate-of-return carrier could complete the process of converting to price
cap regulation before the Bureau adopts a cost model and specifies the amount of model-based support
that will be offered to price cap carriers. We therefore focus on how a rate-of-return carrier might convert
to price cap regulation and receive model-based support after Phase II is offered to the price cap carriers.
Should there be a deadline for rate-of-return carriers to file for such a voluntary conversion to price caps
in order to receive model-based support?
Amount of Support. We seek comment on the amount of support to be offered to future
converts to price cap regulation under Connect America Fund Phase II. Because the funding threshold
and “extremely high-cost” threshold will have been determined and model cost estimates for the
converting carriers will be available at the time of the conversion, one option would be to provide the
28 Id. at 17738, 17740, para. 195, para. 204.
29 The Bureau recently released an order resolving the key network and engineering assumptions for the Connect
America model and has solicited public input on more than 20 topics in a virtual workshop. See Connect America
Fund et al., WC Docket No. 10-90 et al., Report and Order, DA 13-807 (Wireline Comp. Bur. Apr. 22, 2013); see
also Wireline Competition Bureau Announces Connect America Phase II Cost Model Workshop, WC Docket Nos.
10-90, 05-337, Public Notice, 27 FCC Rcd 9882 (Wireline Comp. Bur. 2012); Wireline Competition Bureau
Announces Connect America Phase II Cost Model Virtual Workshop, WC Docket Nos. 10-90, 05-337, Public
Notice, 27 FCC Rcd 11056 (Wireline Comp. Bur. 2012); Wireline Competition Bureau Releases Additional
Discussion Topics for Connect America Phase II Cost Model Virtual Workshop, WC Docket Nos. 10-90, 05-337,
Public Notice, 27 FCC Rcd 13212 (Wireline Comp. Bur. 2012); Wireline Competition Bureau Releases Further
Discussion Topics for Connect America Cost Model Virtual Workshop, WC Docket Nos. 10-90, 05-337, Public
Notice, 27 FCC Rcd 15795 (Wireline Comp. Bur. 2012); Wireline Competition Bureau Seeks Additional Comment
in Connect America Cost Model Virtual Workshop, WC Docket Nos. 10-90, 05-337, Public Notice, 28 FCC Rcd
1007 (Wireline Comp. Bur. 2013); Wireline Competition Bureau Seeks Updates and Corrections to Telcomaster
Table for Connect America Cost Model, WC Docket No. 10-90, Public Notice, 28 FCC Rcd 1151 (Wireline Comp.
Bur. 2013); Wireline Competition Bureau Releases Further Discussion Topics and Seeks Additional Comment in
Connect America Cost Model Virtual Workshop, WC Docket No. 10-90, Public Notice, 28 FCC Rcd 1447 (Wireline
Comp. Bur. 2013); Wireline Competition Bureau Adds New Discussion Topic to Connect America Cost Model
Virtual Workshop, WC Docket No. 10-90, Public Notice, 28 FCC Rcd 1961 (Wireline Comp. Bur. 2013); Wireline
Competition Bureau Announces Availability of Version Three of the Connect America Fund Phase II Cost Model,
WC Docket No. 10-90, Public Notice, DA 13-381 (Wireline Comp. Bur. rel. Mar. 11, 2013); Wireline Competition
Bureau Announces Availability of Version 3.1 of the Connect America Fund Phase II Cost Model, WC Docket No.
10-90, Public Notice, DA 13-956 (Wireline Comp. Bur. rel. Apr. 29, 2013).
converting carrier with the level of support calculated by the model. We seek comment on this method
for determining support for price cap converts.
Budgetary Impact. We seek comment on the monetary impact on the Connect America
Fund of providing a voluntary path for current rate-of-return carriers to opt-in to model-based support,
and how this might impact the Commission’s budget for price cap territories versus rate-of-return
territories. To what extent would this option only be elected by carriers for whom model-based support is
equal to or greater than their current support? How likely is it that some rate-of-return carriers may
choose this voluntary path even if they would receive less support in the near term, for the advantage of
having a steady universal service revenue stream for a defined period of years?
We also seek comment on the effect of a price cap conversion on high-cost loop support.
We note that, in the USF/ICC Transformation Order, the Commission rebased the cap on HCLS to reflect
that price cap carriers and their rate-of-return affiliates would be receiving support pursuant to Connect
America and would no longer be eligible for HCLS.30 Consistent with this precedent, the Bureau
proposes that HCLS should be similarly rebased if a rate-of-return carrier converts to price cap regulation
in the future. The Bureau seeks comment on this proposal.
Commitment to Accept Model-Based Support. Existing price cap carriers will be
provided an opportunity to make a state-level commitment for model-based support after the Bureau
releases a public notice indicating the census blocks eligible for funding and how much Connect America
Phase II support will be offered to them. We seek comment regarding whether new price cap regulated
carriers should similarly be provided an opportunity to accept or decline model-based support, or if the
act of becoming a price cap carrier effectively should be deemed an acceptance of support for the relevant
census blocks. Would there be any instance in which a price cap conversion could be granted, and the
converting carrier could be permitted to decline the support, which then could be assigned through
competitive bidding? Should rate-of-return carriers be permitted to decline model-determined support if
that occurs before the time to finalize the census blocks that will be subject to bidding in the competitive
process following the offer of state-level support to price cap carriers? Should carriers in this situation be
required to elect support on a state-wide basis, if they have multiple study areas within a state, or should
they be permitted to elect support on a study area basis? Are there any other issues relating to the
process of accepting model-based support that would need to be resolved for new price cap converts?
Term for Connect America Phase II Support. The USF/ICC Transformation Order
specifies that Connect America Phase II will last five years. We seek comment regarding whether
carriers converting to price cap regulation after Connect America Phase II commences should receive
Connect America Phase II support on the same time table as other price cap carriers. One option would
be that the Commission would determine successor mechanisms for all carriers receiving Connect
America Phase II support, regardless of when the carrier began receiving support. For example, if a rate-
of-return carrier converted to price cap regulation at the end of year 3 of the Connect America Phase II,
the carrier would only participate in Connect America Phase II for years 4 and 5. Transitioning from
Connect America Phase II to any subsequent mechanisms for all areas at the same time will ensure that
the market-based mechanisms anticipated by the Commission will have the widest applicable area, which
in turn could maximize efficiencies. We seek comment on this proposal. Alternatively, should carriers
that voluntarily elect to receive model-based support receive such support for a term of five years,
commencing with the date they first receive such support? Or, should current rate-of-return carriers that
voluntarily elect to receive model-based support be provided support for a period longer than five years,
such as a period of time to coincide with the intercarrier compensation transition for rate-of-return
30 USF/ICC Transformation Order, 26 FCC Rcd at 17760, paras. 258-59.
carriers. We seek comment on these alternatives, as well as any other proposals for Connect America
Phase II terms that parties may put forth in the record.
Service Obligations. Carriers receiving support pursuant to Connect America Fund Phase
II will be subject to specific service obligations and reporting requirements to demonstrate compliance
with those obligations. We seek comment on whether or how those obligations should be modified for
carriers that convert to price cap regulation after the implementation of model-based support for current
price cap carriers and their rate-of-return affiliates. One option would be for all service obligations to
remain the same for price cap converts as for current price cap carriers, except that the number of
locations served with broadband could be adjusted on a sliding scale to reflect the shorter time for
buildout. We seek comment on this proposal, and also invite commenters to suggest alternatives that
would be consistent with the Commission’s goals in establishing service obligations for Connect America
Fund Phase II.
Alternatives to Price Cap Conversion. We also seek comment on an alternative to
providing Phase II model-based support only to carriers who convert to price cap regulation, as discussed
above. We ask parties to comment on whether the Commission should allow rate-of-return carriers to
elect to receive model-based support in lieu of HCLS and ICLS, but otherwise remain regulated under
rate-of-return regulation. Parties should address the extent to which this alternative would encourage or
allow carriers to shift costs from the common line category to the special access category and the ability
of, and the measures needed for, the Commission to monitor such activities. Parties should identify any
rules that would need to be revised to implement this alternative, including any rule changes necessary to
ensure that a carrier does not receive both Phase II support and support under the existing mechanisms for
rate-of-return companies (i.e., HCLS and ICLS). We also ask parties to address the matters discussed in
the preceding paragraphs as they relate to this alternative approach.
Initial Regulatory Flexibility Act Analysis20.
The USF/ICC Transformation Order and FNPRM included an Initial Regulatory
Flexibility Analysis (IRFA) pursuant to 5 U.S.C. § 603, exploring the potential impact on small entities of
the Commission’s proposal.31 We invite parties to file comments on the IRFA in light of this additional
Initial Paperwork Reduction Act of 1995 Analysis21.
This document contains proposed modified information collection requirements. The
Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and
the Office of Management and Budget (OMB) to comment on the information collection requirements
contained in this document, as required by the Paperwork Reduction Act of 1995, Public Law 104-13. In
addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44
U.S.C. 3506(c)(4), we seek specific comment on how we might further reduce the information collection
burden for small business concerns with fewer than 25 employees.
31 USF/ICC Transformation Order and FNPRM, 26 FCC Rcd at 18364-95, App. P; see 76 Fed. Reg. 78384, 78430-
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deemed to be written ex parte presentations and must be filed consistent with rule 1.1206(b). In
proceedings governed by rule 1.49(f) or for which the Commission has made available a method of
electronic filing, written ex parte presentations and memoranda summarizing oral ex parte presentations,
32 47 C.F.R. §§ 1.1200 et seq.
and all attachments thereto, must be filed through the electronic comment filing system available for that
proceeding, and must be filed in their native format (e.g., .doc, .xml, .ppt, searchable .pdf). Participants in
this proceeding should familiarize themselves with the Commission’s ex parte rules.
For further information, please contact Ted Burmeister, Telecommunications Access Policy
Division, Wireline Competition Bureau at 202-418-7389, or Erin Boone, Telecommunications Access
Policy Division, Wireline Competition Bureau at 202-418-0736; or at TTY (202) 418-0484.
- FCC -
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