Connected Nation recently put out a press release on the additional round of Phase I Connect America Fund subsidies for larger (“price cap”) local telephone companies. Here are some highlights…
2013 Connect America Fund Phase I Program
Largely speaking, this funding opportunity is structured similarly to the Connect American Fund Phase I program of 2012, but there are several important changes in its implementation. Specific program details include:
Areas Eligible for Phase I Subsidies – For the 2013 round of Phase I subsidies, eligible areas now include areas traditionally served by these 13 price cap carriers that do not have access to fixed broadband service of at least 3 Mbps download/768 Kbps upload speeds, according to the National Broadband Map. Last year, eligible areas included only those unserved by fixed broadband service at speeds of only 768 Kbps download/200 Kbps upload. This new definition nearly triples the number of areas eligible for Phase I subsidies in 2013 than were eligible in 2012.
BTOP and BIP Areas Excluded – The FCC will not award Phase I subsidies in areas where the federal government has already allocated subsidies for broadband build-out through the BTOP or BIP programs.
Build-Out Requirements – A provider that accepts the one-time Phase I funding for a census block will have 3 years to build-out broadband at speeds of at least 4 Mbps down/1 Mbps up in that census block.
Use of the National Broadband Map – The FCC will be using the National Broadband Map to identify eligible areas for these subsidies. It will use the version of the Map currently online based on broadband inventory estimates for June 2012.
Subsidy Amounts per Location Served – Under this program the FCC is offering subsidies on a per-location-passed basis with two separate benchmarks. For areas that do not have access to fixed broadband at 768 kbps download/200 kbps upload, the FCC is offering a one-time subsidy of $775 per location passed to fund the upgrade. To upgrade areas that have access 768 kbps/200 kbps fixed broadband but which do not have access to the FCC’s benchmark of 3 Mbps download/768 Kbps upload, the FCC will provide a one-time subsidy of $550 per location.
Allocation of Subsidies Across Price Cap Carriers – The FCC will make up to $485 million available in this program, allocated among the 13 price cap providers. In this Order it sets an initial allocation of $300 million as follows:
These amounts are not, however, a cap for funding available under this program for each provider. Recognizing that the subsidies offered to each provider may not be accepted (as was the case in 2012 Phase I program), the FCC is introducing a mechanism by which the providers can request funds beyond this allocated amount. In particular, each provider can submit subsidy requests for 2013 up to $300 million. If the program is oversubscribed, the FCC will allocate up to $485 million in subsidies based on the proportions of the allocation above.
The allocation, then, is perhaps best thought of as a guarantee for a minimum amount of subsidies if the subsidy recipients agree to make the associated build-out commitments. Providers like PRTC and Cincinnati Bell that do not have an initial allocation may identify areas to which it would make a build-out commitment in exchange for Phase I funds, and those requests may be accepted if all $485 million is not claimed by all other providers.
Process and Mapping Challenges – The FCC is establishing a 60-day challenge process to resolve disputes as to whether the National Broadband Map accurately reflects the availability of broadband in areas eligible for Phase I funding. After price cap providers make their build-out commitments, the FCC will make those areas public and invite comment from the public within 30 days, with another 30 days reserved for rebuttal. In this way, parties will be able to challenge eligibility of the subsidy if, for example, they can prove that a given area is already served. By insisting that these disputes be raised publicly and in a targeted manner, this process represents a significant improvement over prior efforts by the FCC to resolve this category of disputes.
