Connect America Fund Broadband Support for Rural Carriers Could Vary Based on Density

Small rate-of-return (ROR) communications service providers with less than 10 locations per square mile would have more time to build out high-speed broadband in comparison with service providers serving denser areas, according to Universal Service Fund (USF) recommendations made by telecommunication association The Independent Telephone & Telecommunications Alliance (ITTA), which represents mid-size service providers. ITTA representatives in a meeting with the Federal Communications Commission suggested the build-out requirements, which would apply if the FCC were to adopt a proposed speed target of 25 Mbps downstream and 3 Mbps upstream for the model-based Connect America Fund (CAF) program for ROR carriers.

Carriers in denser areas would have to bring 25/3 Mbps service to 75 percent of all fully funded locations in a study area within 10 years, while carriers in less dense areas would only have to build to 50 percent of such locations during that timeframe. ITTA recommendations have played a big role in shaping the FCC’s plans for transitioning today’s high-cost Universal Service Fund program, which traditionally was voice-focused, into a broadband-focused Connect America Fund program. Previously the ITTA recommended that ROR carriers have the option of remaining on today’s program or transitioning to a program similar to the one that already is being implemented for larger price cap carriers – and the FCC is moving ahead based on those recommendations. Today’s program pays part of a carrier’s costs of providing voice and broadband service to high-cost areas based on embedded costs, while the price cap program uses a model to determine a carrier’s support level.