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WCB Announces Agenda for Connect America Phase II Cost

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Released: September 10, 2012


Federal Communications Commission

News Media Information 202 / 418-0513

445 12th St., S.W.


Washington, D.C. 20554

TTY: 1-888-835-5322

DA 12-1463

Release Date: September 10, 2012



WC Docket Nos. 10-90, 05-337

On August 20, 2012, the Wireline Competition Bureau (Bureau) announced that it would
hold a Connect America Phase II cost model workshop.1 Today, the Bureau announces the detailed
agenda for the Connect America Phase II cost model workshop.
The workshop is the next step in implementing Phase II of the Connect America Fund
established in the USF/ICC Transformation Order.2 The workshop will discuss the design and
mechanics of one model that estimates the cost of providing service to the entire nation, submitted
into the record by the ABC Coalition, 3 and also a second model, submitted into the record by
Alaska Communications Systems (ACS), that estimates the cost of providing service to the state of
Alaska.4 The workshop will occur on September 13, 2012 from 8:30 a.m. to 5:30 p.m. and
September 14, 2012 from 8:30 a.m. to 12:30 p.m. The full agenda for the workshop is attached.

1 See Wireline Competition Bureau announces Connect America Phase II Cost Model Workshop, WC Docket
Nos. 10-90 and 05-337, Public Notice, DA 12-1313 (Wireline Comp. Bur. rel. Aug. 20, 2012). This Public
Notice makes slight changes to the previously announced schedule regarding the start and ending times of the
2 The USF/ICC Transformation Order adopted a framework for providing ongoing support to areas served by
price cap carriers, including areas where broadband service is not currently provided, known as Connect
America Phase II. 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 (2011) (USF/ICC Transformation Order or
Order), pets. for review pending sub nom. In re: FCC, No. 11-9900 (10th Cir. filed Dec. 18, 2011). The
Commission will provide ongoing support to these areas through “a combination of a forward-looking cost
model and competitive bidding.” Id., 26 FCC Rcd at 17673, para. 23. In June 2012, the Wireline Competition
Bureau sought comment on a number of cost model threshold issues. See Wireline Competition Bureau Seeks
Comment on Model Design and Data Inputs for Phase II of the Connect America Fund
, WC Docket Nos. 10-
90, 05-337, Public Notice, 27 FCC Rcd 6147 (Wireline Comp. Bur. rel. June 8, 2012).
3 Letter from Jonathan Banks, USTelecom, to Marlene H. Dortch, Federal Communications Commission, filed
Feb. 13, 2012 (attaching updated documentation of CQBAT model) (CQBAT letter). This submission updated
the ABC Coalition’s prior proposal for a forward-looking model, which had been submitted prior to the release
of the USF/ICC Transformation Order. Letter from Robert W. Quinn, Jr., AT&T, Steve Davis, CenturyLink,
Michael T. Skrivan, FairPoint, Kathleen Q. Abernathy, Frontier, Kathleen Grillo, Verizon, and Michael D.
Rhoda, Windstream, to Marlene H. Dortch, Secretary, FCC, WC Docket No. 10-90 et al., Attach. 1 at 13 (filed
July 29, 2011) (ABC Plan). The ABC Coalition model was submitted pursuant to a protective order adopted by
the Bureau. See Connect America Fund, High-Cost Universal Service Support, WC Docket Nos. 10-90 and
05-337, Second Supplemental Protective Order, 27 FCC Rcd 1503 (2012).
4 Comments of Alaska Communications Systems Group, Inc., WC Docket Nos. 10-90 and 05-337 (filed Feb.
14, 2012); See Connect America Fund, High-Cost Universal Service Support, WC Docket Nos. 10-90 and 05-
337, Second Protective Order, 27 FCC Rcd 1494, 1494 n.2 (2012).

On September 13th, the workshop will take place in the Commission Meeting Room (TW-
C305), 445 12th Street, S.W., Washington, D.C. and will be streamed live at On September 14th, the workshop will take place in the Commission’s
fourth floor South Conference Room (4B-516) and will also be accessible via WebEx and audio
To Join the Online Meeting on September 13th:
1. Go to
2. Enter your name and email address.
3. Enter the meeting password: fcc123
4. Click "Join Now".
To Join the Audio Conference on September 14th:
Call in number: 1-888-858-2144
Access Code: 9639001
Participants will also be able to submit questions via e-mail to the staff during both days of
the workshop by sending their e-mails to
Reasonable accommodations for people with disabilities are available upon request. The
request should include a detailed description of the accommodation needed and contact information.
We ask that requests for accommodations be made as soon as possible in order to allow the agency
to satisfy such requests whenever possible. Send an email to or call the Consumer
and Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (TTY).
For additional information about the workshop, please contact David Zesiger in the Wireline
Competition Bureau at (202) 418-2081, or via e-mail at
- FCC -


SEPTEMBER 13 & 14, 2010


SEPTEMBER 13, 2012,




SESSION 1: 9:15 – 10:30 AM

v Overview of the CostQuest Broadband Analysis Tool (CQBAT) and its Economic
o High Level Overview
o Review of General Assumptions
Overall design
Coverage of existing broadband
Network design
Take rate
Classifying companies to size and type
o Network Capability
Voice / data / video
o Overview of Economic Underpinnings
Basic financial model
v Q/A


SESSION 2: 11:30 – 12:30

v Overview of CQBAT and its Economic Underpinnings (continued)
o Overview of Economic Underpinnings (continued)
Greenfield and brownfield
Cost assignment
o Capturing Company and Geographic Specific attributes
v Comparison to Prior Modeling Approaches (Specifically the High-cost Proxy Model-
v CQBAT Platform Overview
o Review of Data Sources
o Logic/Structure
High-level review of code steps
Output structure
v Q/A


SESSION 3: 1:30 – 3:00 PM

v CQBAT Input Review (and sources)
o Capex
o Opex
o Plant Mix
o Sharing
o Take Rate
o Regional Cost Adjustment (what is it applied to)
v CQBAT Network Capex Overview
o Middle Mile
Network routing
o Telecom Plant
Review network topology development
Fiber to the DSLAM (FTTD) vs. Fiber to the Premises (FTTP)
What is in the Central Office (CO)


SESSION 4: 3:30 – 4:30 PM

v ACS Model Introduction
v Discussion of Significant Cost Differentials In Deploying Broadband in Alaska
v Summary of ACS Proposed Model
Modeling Process
Model Results
v Q /A


SESSION 5: 4:30 – 5:30 PM

v Continuation of CQBAT Network Capex Overview
o Network Topologies within CQBAT
o Sizing Assumptions
o Interplay of User Inputs
o Shared Cost Allocation
v Q/A

SEPTEMBER 14, 2012


SESSION 1: 9:00 – 11:00 AM

v CQBAT Opex Overview
o Structure
o Development of Costs and Drivers

v Treatment of Areas Outside the “Mainland”
v Online CQBAT
o Review of Run Time Parameters
o Overview Filter Fields
o Reporting
o Review Audit Reports
o Review Data Dumps
v Q/A


SESSION 2: 11:30 AM – 1:00 PM

v Review of Current CQBAT Results
o What Runs Were Filed with the FCC
o Report Results
o Maps
v Key Issues of a Refresh With Logic “as-is”
o Use of 2010 Census
o Wire Center boundaries to Use
o Customer Data to Use
o Extent of Existing Broadband Coverage
o Regional Adjustment Refresh
o Key Assumptions to Review
v Q/A

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