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Presentation on Status of Universal Service Reform Implementation

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Released: November 14, 2013

Connect America Fund
Implementation Report

November 14, 2013


• Connect America Fund for Price Cap Areas
• Connect America Phase I
• Connect America Phase II
• Reforms for Rate of Return Areas
• Other Improvements to FCC Data
• Tribal Mobility Fund Phase I
• Tribal Engagement
• Key Activities Ahead


Connect America Phase I Round 2

• Phase I incremental support intended to quickly expand
broadband while Commission works on Phase II implementation
• In August, price cap carriers submitted elections for build-out
areas, requesting over $385 million to deliver new broadband
service to over 600,000 locations

Round Two Authorizations to Date

Puerto Rico

Round Two Elections

Progress on Phase II Implementation

• Forward-Looking Cost Model
• Current version of the model released in August
• Illustrative model results posted on
• Working on inputs for non-contiguous United States
• Targeting release of next version in near future
• Phase II Webinars
• In September, conducted three separate webinars for NARUC members
and their staffs, presenting an in-depth overview of Phase II
implementation, the cost model, and the challenge process
• All three staff presentations available on FCC website, and audio
recordings available on USAC’s website

Phase II Service Obligations for Price Cap

Carriers Making State-Level Commitment

•Bureau Order released October 31, 2013

• Specifies how price cap carriers can demonstrate they meet requirements
for “reasonably comparable” pricing of voice and broadband

• Adopts 100 GB initial minimum usage allowance, to the extent carrier
chooses to set usage allowances

• Adopts round trip latency requirement of 100 ms or less and provides two
options for how such latency can be demonstrated

• Addresses how these metrics will applied to determine what areas we will
consider served by an unsubsidized competitor


Other Reforms

• July 2013 Bureau High Cost Loop Benchmarks Order
• Maintained existing formula for 2014
• Waived application of rule in Alaska for remainder of 2013 and 2014
• Deferred further phase-down of support for those carriers subject to

• Study Area Boundary Data Collection
• Data collected in May and June from incumbent carriers and states
• Since June, have been working to process the files submitted and compile
information into a consolidated map
• Next step: publish online study area boundary map to facilitate boundary


Other Improvements to FCC Data

• Survey of Urban Rates
• Recently received OMB approval to conduct urban rate survey, which
will be used to establish benchmarks for reasonably comparable voice
and broadband rates
• Will be conducting survey in near future
• Annual Reporting
• In October, eligible telecommunications carriers (ETCs) filed new
annual reports
• Bureau staff reviewing; state certifications due next month


Mobility Fund Phase I

• Mobility Fund Phase I (Auction 901)
• Substantial progress made in reviewing long-form applications received
from the 33 winning bidders
• Initial disbursements made to 27 winning bidders authorized to receive up
to $219 million in winning bids
• Tribal Mobility Fund Phase I (Auction 902)
• Scheduled for Feb. 25, 2014
• Public Notice released on Aug. 7, 2013, announcing auction procedures
• Filing window for applications to participate: Nov. 18 – Dec. 5, 2013

Tribal Government Engagement

• ETCs required to demonstrate on an annual basis that they have
meaningfully engaged with Tribal governments in their universal
service supported areas
• ETCs reported on Tribal engagement for first time in annual
reports filed in October
• In 2014, ONAP plans to take affirmative steps to facilitate field
meetings on engagement and best practices between Tribal
governments and ETCs


Key Activities Ahead

• Complete authorizations of funding for Connect
America Phase I Round 2
• Adopt Connect America Phase II cost model
• Complete study area boundary reconciliation
• Conduct rate survey
• Tribal Mobility Fund I Auction

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