CenturyLink, Frontier Propose $176 Million in Interim ILEC Voice Support for Unfunded Areas
CenturyLink and Frontier Communications asked the FCC to allocate $176 million in interim USF support to price-cap incumbent telcos providing voice service in costly remote areas where they are no longer being subsidized. “This support would flow for a maximum…
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of two years, and likely less,” the two ILECs said in a filing, posted Wednesday in docket 10-90, summarizing recent meetings with aides to all five commissioners and a senior Wireline Bureau official. The telcos said the support is needed to ensure voice service continuity “in extremely high-cost and other unfunded locations” of territories served by price-cap carriers in states where they accepted new Connect America Fund Phase II support. Those areas constitute about 6 percent of the census blocks carriers serve in those states, the telcos said. In those areas, they said, the incumbents aren't receiving either the CAF II broadband-oriented support or legacy USF phone support but still must continue to offer voice service under FCC rules. Carriers have complained of an unfunded mandate (see 1601220046). CenturyLink and Frontier noted that the FCC plans to deal with the costs to serve areas either through an interim CAF II subsidy reverse auction or a remote areas fund (RAF), neither of which has been set up. “In the interim, however, restoring the inevitable voice service disruptions in unfunded areas presents a significant universal service challenge. Price cap ILECs that accepted offers of model-based CAF Phase II support are obligated to use such support to deploy broadband to covered locations; they cannot shift these monies to support voice service in the unfunded areas,” said the two telcos, which noted the ILECs must invest “significant amounts” to provide broadband in areas where they accepted CAF II money. They said the proposed interim funding should be based on previous legacy "frozen support" for the unfunded areas, as determined by the cost model. It would last only until the end of the CAF II auction process and could be drawn from the $100 million per year budgeted for the RAF and a “tiny fraction of the existing CAF reserve amount” held by the Universal Service Administrative Co., they said.