Request for Connect America Fund Cost Models

On November 18, 2011, the Federal Communications Commission released the Universal Service Fund/Intercarrier Compensation Transformation Order, which comprehensively reforms and modernizes the universal service and intercarrier compensation systems into a new Connect America Fund (CAF) to ensure that robust, affordable voice and broadband service are available to Americans throughout the nation. Among other things, the FCC adopted a methodology for providing CAF support in areas served by price cap carriers that will use a forward-looking cost model to estimate the costs of deploying broadband-capable networks in high-cost areas and identify at a granular level the areas where support will be available. Using the cost model, the FCC will offer each price cap local exchange carrier (LEC) annual support for a period of five years in exchange for a commitment to offer voice service across its service territory within a state and broadband service to supported locations within that service territory. The FCC also intends to use the forward-looking cost model to identify extremely high-cost and remote areas (in both price cap and rate-of-return territories) that should receive support from the Remote Areas Fund. As with the current model, the FCC expect that the new model will be readily available to support recipients and the public for their ongoing use.

The goal is to adopt a specific model to be used for estimating support amounts in price cap areas by the end of 2012 in order to provide support beginning January 1, 2013. To meet this timetable and to ensure that interested parties have adequate time to evaluate the models and inputs under consideration, the Wireline Competition Bureau requests parties to submit forward-looking cost models, consistent with the FCC’s order, for consideration in this proceeding as soon as possible, but no later than February 1, 2012. Parties should notify the Bureau of their intention to do so no later than three days after publication of this public notice in the Federal Register or by December 30, 2011, whichever comes later, so that there is sufficient time before the February 1 deadline to craft the terms of any protective order(s) necessary to resolve any issues related to licensing of third party data and making appropriate arrangements for providing access to the public