Price Cap Carriers, Small Cablecos Tussle Over CAF Cost Model

The nation’s largest price cap carriers and the American Cable Association have been waging a war of words over the cost model that the price cap carriers proposed for phase 2 of the Connect America Fund, the broadband Universal Service program.

Several of the nation’s largest price cap carriers have been working together for a couple of years now as the ABC Coalition, a coalition formed specifically to enable those carriers to develop consensus about Universal Service reform and to speak with a common voice on those reforms. (Initial members included AT&T, CenturyLink, FairPoint, Frontier, Verizon, and Windstream.) At issue is the cost model that will be used to determine the level of support that price cap carriers will be offered to help cover the costs of bringing broadband to areas of their service territories that are costly to serve and that cannot get broadband today. The price cap carriers submitted a cost model which has come under attack by the ACA, which argues that the model would direct more money than merited to the price cap carriers.