Frontier: CAF-II should not place ETC obligations on ILECs outside of service areas

Frontier Communications says that the FCC should clarify that service providers that have accepted Connect America Fund phase II (CAF-II) funding do not have to provide voice service in extremely high-cost census blocks outside of their service area.

Echoing comments made earlier by CenturyLink and the U.S. Telecom Association, Frontier said that it would like the FCC to refresh its record on issues related to eligible telecommunications carrier (ETC) obligations to ensure that ETC and CAF-II funding are "appropriately matched."

It added that by doing this it could avoid "consumer disruption in access to communications services and releasing the list of census blocks where price cap carriers continue to have the ETC obligation to provide voice service."

Service providers such as Frontier, CenturyLink (NYSE: CTL) and AT&T (NYSE: T) that have accepted CAF-II support have an unfunded obligation to provide voice service in high-cost census blocks.  

Frontier said it agrees with USTelecom's proposal to allocate support by distributing frozen funds to service providers in "high-cost census blocks in proportion to the amount of support that the Connect America Cost Model predicts is required."

In addition, Frontier said that the FCC's census blocks where price cap carriers still have federal high-cost voice obligations is "necessarily imperfect."

Frontier announced that it had accepted $283 million annually in CAF-II support from the FCC to deploy broadband to more than 660,000 high-cost rural locations throughout its current 28-state service area.

Similar to CenturyLink, Frontier will now have to continue to meet its high-cost voice service obligations in high cost areas, but will "no longer receive funding for doing so."

At this point, the FCC has not specified how it would provide funding for the voice obligation in these extremely high-cost areas to service providers like Frontier.

Frontier said that taking up USTelecom's proposal and clarifying the public block list does not create unnecessary obligations and is a way to close up two loose ends with the CAF-II program.

"Adopting USTelecom's proposal for the reallocation of frozen support will ensure that all consumers can receive voice service and will ensure that carriers do not have unfunded obligations," Frontier said. "Additionally, clarifying that the Public Notice's census block list does not independently create any obligations -- in other words, that a carrier only has an obligation if it is in fact the service provider -- is a straightforward way to remove confusion and handle a necessarily imperfect model."

For more:
- see this FCC filing (PDF)

Related articles:
Frontier will use CAF II funding to expand broadband in acquired Verizon territories
CenturyLink: FCC's CAF-II program should address unfunded rural area voice obligations

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