The Federal Communications Commission (FCC) released the funding structure for its Enhanced Alternative Connect America Model (A-CAM) program, as reactions to the program’s recent extension continue to vary across the industry.
With the new offer, existing A-CAM carriers and carriers that are still receiving legacy support will be funded for the deployment of voice and broadband-capable networks in their operating regions.
The Enhanced A-CAM model will cover up to 80% of the costs to serve locations with a monthly funding threshold of $63.69 and a funding cap per location of $350. In other words, to receive funding for a particular location, it must cost at least $63.69 per month to provide the necessary broadband services to that location. Tribal lands have a funding threshold of $47.76 and a funding cap of $365.93.
For locations where an incumbent local exchange carrier (ILEC) has already deployed 100/20 Mbps or faster broadband, the extended offer can include 60% of their current A-CAM support level, even if they previously received loans or grants for broadband deployment. However, that excludes areas where competitors are funded. For locations currently served by both the ILEC and a competitor with high-speed broadband, the offer includes 33% of the ILEC’s current A-CAM support level.
Carriers have until September 29 to let the FCC know, on a state-by-state basis, whether they would like to receive Enhanced A-CAM support. Those accepting support will have specific deployment obligations, with a final deadline in 2028. They are also required to report their progress annually.
The FCC decided to renew its A-CAM program in July, making an additional $13.5 billion in support available over a 10-year extension of the current A-CAM term. At the same time, the Commission raised the speed requirements to at least 100 Mbps downstream and 20 Mbps upstream for participating providers.
Established in 2016, A-CAM aims to support broadband deployments in eligible high-cost areas. Thus far, it’s consisted of two iterations: A-CAM I, which required providers to deploy speeds of at least 10/1 Mbps, and A-CAM II, which the FCC introduced in 2018 and increased the speed requirement to 25/3 Mbps. A-CAM I runs through 2026, while A-CAM II extended support through 2028. The program doesn’t require providers to use a specific type of technology for deployment.
Industry divided over A-CAM
The FCC had considered extending A-CAM since May of last year, when it issued a Notice of Proposed Rulemaking to see whether it should adopt changes suggested by the ACAM Broadband Coalition, comprised of rural operators like TDS Telecom, Great Plains Communications and others.
TDS Telecom has been a vocal proponent of these changes as has NTCA – The Rural Broadband Association, while others have stood firmly against the extension of A-CAM.
Andrew Petersen, TDS SVP of corporate affairs, said the company is “currently studying the details” of the Enhanced A-CAM offer structure, but believes “the program, and the regulatory predictability that it will provide, will be a game changer for our customers and the communities we serve in rural America.”
NTCA EVP Mike Romano told Fierce this week that as a result of the FCC’s new offers, NTCA members have more options to deliver on a mission of universal connectivity. The NTCA is working now with members as they attempt to understand and evaluate the new offers.
Despite its support for Enhanced A-CAM, Romano said the NTCA acknowledges that in some areas, the extended program will not be a good fit in terms of getting and keeping communities connected. “In some cases, even the best model calculations don’t accurately reflect conditions on the ground, and in other cases persistently bad broadband coverage maps can artificially and incorrectly reduce the level of support that is in fact needed to sustain universal service in a rural geography,” he said.
Romano even noted the most significant confusion that NTCA is hearing from members as they evaluate their enhanced A-CAM offers is that broadband coverage maps show service from other providers that might far exceed what is actually available. While there is the opportunity to attempt to challenge these claims, he said this process is “complicated and it will likely be hard for some companies to take an enhanced A-CAM offer based upon the hope that overstated broadband coverage claims might be fixed later and support adjusted appropriately.”
Meanwhile, NCTA – The Internet & Television Association (not to be confused with NTCA) has taken a staunch position against extending the A-CAM program. To no avail, NCTA, along with Comcast, Charter and Cox, met with the FCC on several occasions this year to dissuade the Commission from moving forward with the Enhanced A-CAM program.
The parties argued that operators “have made significant investments” in rural expansions in recent years and that “expanding the ACAM programs by awarding incumbent LECs a sole-source contract, with no competitive bidding process, would be a poor policy choice.”
This week an NCTA representative told Fierce “it is concerning that the FCC would commit over $13 billion to specific broadband providers without a competitive process that is open to all qualified providers.” According to NCTA, cable operators are already delivering state-of-the-art broadband networks to millions of rural homes and fully capable of reaching many more when allowed to participate in government support programs.
The NCTA rep added that “simply granting 10 years of new support to incumbent phone companies will ultimately add to project expense and fail to bring consumers the benefits of competition in broadband builds.”