The Federal Communications Commission (FCC) has announced that its Wireline Competition Bureau (WCB) has extended offers of broadband subsidies to 516 rural ‘rate-of-return’ companies in 46 states through a predictable cost model, rather than using the current legacy system, which dates to the era of voice-only service. If all carriers opt in to the offer, they will be required to deploy 25Mbps/3Mbps (down/uplink) broadband to at least 1,126,082 homes and businesses. The FCC previously voted to make this offer in December last year.
The FCC modernised its support for rate-of-return companies through use of the Alternative Connect America Cost Mode (A-CAM), to determine support. The model calculates support required to provide service census block-by-census block and delivers that support over a ten-year term, with a defined buildout schedule.
Rate-of-return carriers receive approximately USD2.4 billion each year of the FCC’s USD4.794 billion in universal service support for rural broadband, and of that, the 262 companies that have already elected A-CAM support get approximately USD607 million per year.