Today:  FCC Rural Broadband, FCC Office of Economics and Analytics  

FCC Rural Broadband

At its Open Meeting yesterday, the FCC voted to update the Connect America Fund (CAF) programs providing support for small, rural, as rate-of-return carriers, to enable them to deliver faster broadband speeds and expanded coverage in rural areas. In return for additional funding, the FCC will require providers to expand availability of service offering downloads of at least 25/3 Mbps service, compared to the current 10/1 Mbps standard. Updates include:

• Offering up to $67 million a year in additional support for carriers receiving funding through the Connect America Fund’s Alternative Connect America Cost Model, or ACAM. This revised offer alone has the potential to increase by 100,000 the number of rural homes and businesses with access to 25/3 Mbps service.
• Opening a new window for carriers receiving support through legacy mechanisms to voluntarily move to model-based support through the A-CAM II offer, which incentivizes deployment while reducing regulatory burdens. In return, these carriers would be required to provide 25/3 Mbps service to all homes and businesses whose costs are fully funded through the A-CAM cost model.
• Increasing the $1.4 billion annual budget for carriers that continue to get support from legacy mechanisms by initiating an annual inflation adjustment, eliminating 2018 cuts mandated by budgetary rules established under the prior Administration, and setting a guaranteed floor of minimum support for each carrier. In return, legacy providers would be required to expand deployment of 25/3 Mbps service.

The Report and Order also:

• Reduces  the maximum per-line subsidy in the legacy program from the current $250 to $200 by July of 2021.
• Eliminates capital expenditures allowance rule which failed to incentivize investment by companies.
• Determines that a market-based auction can best eliminate wasteful subsidies to legacy providers serving areas that are entirely or almost entirely overlapped by unsubsidized providers.

A Further Notice of Proposed Rulemaking seeks comment on how to structure such an auction, as well how to address conversions to broadband-only lines and whether to include a Tribal Broadband Factor for legacy carriers

FCC Office of Economics and Analytics

The FCC announced the official opening of the FCC’s Office of Economics and Analytics (OEA). This new office will help consistently and thoroughly incorporate economic and data analysis into the policy-making work of the agency.

• OEA strengthens and centralizes the role of economic analysis by housing the vast majority of FCC economists in one office, including the entire staff of the former Office of Strategic Planning and Policy Analysis. The new office includes four divisions:
• The Economic Analysis Division, which provides analytical and quantitative support for rulemakings, transactions, reviews, adjudications, and other matters.
• The Industry Analysis Division, which designs and administers significant, economically-relevant data collections.
• The Auctions Division, which leads auction design and implementation issues, including for spectrum and universal service auctions.
• The Data Division, which develops and implements best practices, processes, and standards for data management.

Chairman Pai said, in part: “The communications sector is a major part of America’s economy, and our rules can substantially affect incentives of companies and consumers. This makes it essential that we systematically incorporate sound economics in our work. This new office will ensure that strong economic analysis and data analytics inform our efforts.”

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The Regulatory Mix, Inteserra’s blog of telecom related 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 an Inteserra Briefing.