Expect a final release of the model soon and the start of 90-day election period

On July 25, 2016, the FCC released an Order addressing 147 comments containing 273 challenges to Alternative Connect America Model (A-CAM) coverage data that were filed in April. The FCC only granted 80 challenges, and denied or dismissed the remainder. With the A-CAM challenge process concluded, the FCC will soon release the final adjustments to the A-CAM and initiate the 90-day election period for rate-of-return carriers to decide if they want to accept model-based support.

The A-CAM Challenge Order was disheartening for many rate-of-return carriers that filed detailed and well-reasoned comments. However, it was anticipated that the bar would be very high for any rate-of-return carrier seeking to prove that a competitor does not have service in a census block absent the competitor revising its Form 477. As such, the FCC denied many of the challenges that were based on data gathered from a competitor’s online service availability tool or from drive tests/visual inspections of competitor’s equipment. The FCC did not find this evidence to be more compelling than the competitor’s certified Form 477. Also, requests made by rate-of-return carriers after March 30 to update June 2015 Form 477 data within their own study area were denied. On the other hand, comments filed by competitors requesting the FCC to use December 2015 Form 477 data and informing the FCC of revisions to their Form 477 data were accepted.

Seventy-six of the challenges filed were “split block” challenges, where a rate-of-return carrier identified blocks that are partially in its study area and partially in a neighboring ILEC’s study area. Additionally, JSI filed comments on behalf of 26 companies requesting the FCC modify the A-CAM to remove the impact of split blocks. In the A-CAM, the FCC disqualified entire blocks from support where the adjacent ILEC had reported 10/1 Mbps service using fiber-to-the home (FTTH) or cable modem in its own portion of the block. Split blocks also could cause carriers to be excluded from A-CAM support if the adjacent ILEC reported 10/1 Mbps in the shared census blocks which then caused the carrier to exceed the 90% 10/1 threshold.

In denying the challenges and JSI’s request, the FCC claimed that it is “not administratively possible” to delineate partial blocks as served or unserved; and added that “[t]here is no way in the current model architecture” to achieve an outcome where split blocks are acknowledged. The FCC rejected JSI’s argument that neighboring ILECs are subsidized and cannot traverse study area boundaries and stated that it made a “blanket decision” to exclude any block where any provider has FTTH or cable modem service. The FCC even assumed that since some rate-of-return carriers have CLEC affiliates, they can actually cross study area boundaries, so “the simplest course was to exclude census blocks that are partially served using FTTP or cable.”

Essentially, the FCC concluded that it will not modify the model to incorporate split blocks and even claimed that modification is unnecessary as there would be only limited impact overall in doing so. In the FCC’s eyes, the model is targeting support to where it is needed most and the split block impact is negligible and unlikely to be a determining factor of whether or not a carrier elects the A-CAM.

The road is now cleared for the FCC to move ahead with issuing the offer of A-CAM support to rate-of-return carriers. JSI anticipates this will happen this week or next. With decisions due 90 days later, it will be critical to have all the information you need to make the right decision for your company—and your customers. For more information about the A-CAM challenge results, contact John Kuykendall or Cassandra Heyne in the Maryland office at 301-459-7590. For A-CAM analysis, contact Steve Meltzer or Brian Sullivan, also in JSI’s Maryland office.

Source: JSI e-Lert