CAF FNPRM Would More Than Double Broadband Speed Requirement
Price-cap carriers could be required to build broadband capable of delivering 10 Mbps downstream as part of Phase II of the Connect America Fund, according to a further NPRM on circulation, said agency and industry in interviews Monday. That proposed speed requirement is more than double the 4 Mbps downstream requirement specified in the original 2011 USF/intercarrier compensation order. An order and FNPRM are tentatively scheduled to be voted on at the FCC’s April 23 meeting, the agency said last week (http://fcc.us/1eajJaE).
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Price-cap carriers wonder whether a change in the download speed requirement would come with increases in support, or changes in how long carriers would have to build out the network, or whether they would have an obligation to serve as many locations, ILEC officials told us. “Obviously a change in the speed of that magnitude would certainly make it more difficult to fulfill the obligations” if a carrier elects to serve broadband statewide, one ILEC official said. One “logical conclusion,” he said, might be that carriers would be less likely to accept CAF support.
The FNPRM does not contemplate raising the amount of support, an FCC official said. Under a greenfield model built on fiber-to-the-premises, going from 4 Mbps to 10 Mbps, or even a little higher, wouldn’t change the price model that much, the official said. The further notice also contemplates increasing the required upload speed, agency and industry officials said.
The commission needs to have a “rational, reasonable relationship between the obligations and the amount of support,” said Windstream Senior Vice President Eric Einhorn. If the commission is asking about changing the minimum speed, it should also ask about what new support level makes sense, he said. “It is very important to have a logical and reasonable linkage between the obligations and the amount of the support.”
"All the different elements of this proposal work together,” an ILEC official said. One can’t just hold a bunch of things constant and then change one element and “still have a deal,” he said. There are “trade-offs” between the various parts of any universal service proposal; if some people want more speed, fine, but the funding period, locations and other variables are all codependent, he said.
With an increase in the Phase II speed requirement, would the definition of unsubsidized providers change accordingly as well? one ILEC official asked. That, and how the increased speed requirement might affect the challenge process by unsubsidized competitors, is an open question, an FCC official said. Another question, ILEC officials said, is whether the National Broadband Map’s 3 Mbps/768 kbps speed figure, currently used by the FCC as a proxy for determining broadband coverage, would continue to be an appropriate proxy for the new higher speed.
The purpose of increasing the speed requirement would be to ensure rural users get speeds “reasonably comparable” to what’s available in non-rural areas, Chairman Tom Wheeler said in a blog post Wednesday (http://fcc.us/1iq7vHP). “Yesterday’s broadband speeds are not the speeds of today,” Wheeler wrote. “We will ask the question about increasing the speed so that rural consumers aren’t stuck with slower speeds than their urban cousins."
Officials from USTelecom, AT&T, Verizon, CenturyLink, Windstream and Frontier met Thursday with an aide to Wheeler to discuss the FNPRM. “Attendees expressed concern about a potential increase in the broadband speed requirement without concurrent changes in other terms for carriers electing cost-model based support,” said an ex parte filing (http://bit.ly/1emP3gP). “We also discussed whether other elements of CAF II, such as the definition of areas served by unsubsidized broadband providers, should change based on a revised broadband speed requirement.”