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Connect America Fund

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Released: February 15, 2012


Federal Communications Commission

News Media Information 202 / 418-0500

445 12th St., S.W.


TTY: 1-888-835-5322

Washington, D.C. 20554

DA 12-222

Release Date: February 15, 2012



WC Docket Nos. 10-90, 05-337

On November 18, 2011, the Federal Communications Commission (Commission) released the
USF/ICC Transformation Order.1 In that Order, the Commission adopted a methodology for distributing
universal service support under the Connect America Fund (CAF) Phase II in areas served by price cap
carriers.2 The methodology will use a forward-looking cost model to estimate the costs of deployment of
broadband-capable networks in high-cost areas and identify at a granular level the areas where support
will be made available. The Commission delegated to the Wireline Competition Bureau (Bureau) “the
task of selecting a specific engineering cost model and associated inputs” that meet criteria specified in
the USF/ICC Transformation Order.3 To begin the selection process, the Bureau released a Public Notice
on December 15, 2011, inviting parties to submit forward-looking cost models with certain specific
capabilities by February 1, 2012.4
The Bureau has received two models in response to that request, one from Alaska
Communications Systems (ACS) and one from the United States Telecom Association. Interested parties
may access the models and all underlying data, formulae, computations, and associated software to
evaluate their suitability for use in determining support levels for CAF Phase II in price cap areas, subject
to protective orders.5

1 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, GC Docket No. 09-
51, WT Docket No. 10-208, Report and Order and Further Notice of Proposed Rulemaking, FCC 11-161 (rel. Nov.
18, 2011) (USF/ICC Transformation Order); pets. for review pending sub nom. Direct Commc'ns Cedar Valley,
, No. 11-9581 (10th Cir. filed Dec. 8, 2011) (and consolidated cases).
2 For purposes of CAF Phase II, the Commission concluded that it would 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. A “price cap territory” therefore includes a study area served by a rate-of-return operating
company affiliated with price cap companies. See USF/ICC Transformation Order at para. 158, n.253.
3 Id. para. 157.
4 Request for Connect America Fund Cost Models, Public Notice, DA 11-2026, WC Docket Nos. 10-90, 05-337
(Wireline Comp. Bur.) (rel. Dec. 15, 2011).
5 See USF/ICC Transformation Order at 74, para. 192; December Public Notice at 1, para. 4.

Directions for accessing the models filed into the record of this proceeding may be obtained at: The Bureau expects to release a
subsequent Public Notice later this month providing additional information on the next steps for
development of the CAF Phase II cost model.
For further information, please contact Katie King, 202-418-7491,, or
Wesley Platt, 202-418-2821,

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