TDS says rural service providers need flexibility to meet FCC's 25/3 Mbps speed mandate

TDS Telecom may be an advocate of expanding broadband services, including offering 1 Gbps FTTH, but it is concerned that the FCC's new 25/3 Mbps definition of broadband may be challenging to meet in rural areas where buildout costs are higher.

In an FCC filing, TDS Telecom said that the regulator should provide flexibility for rate of return (RoR) companies that have used Universal Service Funds (USF) to expand voice service and now broadband into harder to reach rural areas.

"If the Commission increases the speed requirements for RoR companies from the 10/1 Mbps used for Price Cap companies to 25/3 Mbps, that would increase deployment costs substantially, especially on the upload side," TDS Telecom said in an FCC filing. "As the model demonstrates, costs increase substantially as one builds out from the core of the network to its outer edges, which typically are in less dense regions."

TDS added that in order "account for this increase in cost, flexibility would be needed to enable RoR companies to maximize their resources and reach the greatest number of subscribers given the amount of support generated by the model."

Like other telcos, TDS Telecom would like bring 25/3 Mbps services to as many of its customers as it can, but in a number of "preliminary" studies it conducted the service provider said that building out such speed to all eligible customers would be difficult.  

"While TDS Telecom would aim to build out to 25/3 to as many customers as possible, flexibility in meeting all of the fully funded eligible locations could help ensure that the greatest number of customers received broadband at least at the 10/1 level," TDS Telecom said.

In making the transition to the new to the new USF mechanism, the FCC would have to take into account a number of factors such as the depreciation of network facilities, how they are replaced, and how these facilities are paid for.

In January, the FCC voted along party lines during its monthly meeting to change the definition of broadband from a minimum of 4/1 Mbps to 25/3 Mbps, a move that will force incumbent telcos and cable operators to rethink how they market and deliver services to consumers and businesses.

For more:
- see this FCC filing (PDF)

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