The Regulatory Mix, TMI’s daily blog of regulatory activities, is a snapshot of PUC, FCC, legislative, and occasionally court, issues that our regulatory monitoring team uncovers each day. Depending on their significance, some items may be the subject of a TMI Regulatory Bulletin.
At its December 11, 2014, Open Meeting, the FCC adopted an order revising its Connect America Fund (CAF) rules. Among other things, the Order:
- Requires companies receiving CAF funding for fixed broadband to serve consumers with speeds of at least 10 Mbps for downloads and 1 Mbps for uploads;
- Increases the terms of support for price cap carriers from five years to six years, with an option for a seventh year in certain circumstances;
- Provides increased flexibility in the build-out requirement;
- Forbears from certain universal service obligations in low-cost census blocks where price cap carriers are not eligible to receive Connect America support, as well as census blocks where the carriers face competition;
- Requires recipients that decline Connect America support in a state to continue to deliver voice service to high-cost census blocks until replaced through a competitive bidding process by another subsidized carrier that is required to deliver voice and 10/1 broadband.
The Order also makes changes that will distribute traditional universal service support for small carriers more equitably and curb waste and establishes consequences for failing to meet broadband service obligations.
Also at its December 11, 2014, Open Meeting, the FCC approved further modernization of its E-rate program. The Order raises the spending cap on the E-rate program from the current $2.4 billion to $3.9 billion — the first reset of the cap since it was initially set at $2.25 million in 1997. In addition to making more funding available for libraries and schools to purchase broadband connectivity, the Order also takes further steps to improve the overall administration of the program and maximizes the options schools and libraries have for purchasing affordable high-speed broadband connectivity. This includes:
- Suspending the requirement that applicants seek funding for large up front construction costs over several years, and allowing applicants to pay their share of one-time, up-front construction costs over multiple years
- Equalizing the treatment of schools and libraries seeking support for dark fiber with those seeking support for lit fiber.
- Allowing schools and libraries to build high-speed broadband facilities themselves when that is the most cost-effective option, subject to a number of safeguards
- Providing an incentive for state support of last-mile broadband facilities through a match from E-rate of up to 10% of the cost of construction, with special consideration for Tribal schools
- Requiring carriers that receive high cost support to offer high-speed broadband to schools and libraries located in geographic areas receiving those subsidies at rates reasonably comparable to similar services in urban areas; and
- Expanding support for internal connections.