§ 54.312   Connect America Fund for Price Cap Territories—Phase I.

   (a) Frozen High-Cost Support. Beginning January 1, 2012, each price cap
   local exchange carrier and rate-of-return carrier affiliated with a
   price cap local exchange carrier will have a “baseline support amount”
   equal to its total 2011 support in a given study area, or an amount
   equal to $3,000 times the number of reported lines for 2011, whichever
   is lower. For purposes of this section, price cap carriers are defined
   pursuant to § 61.3(aa) of this chapter and affiliated companies are
   determined by § 32.9000 of this chapter. Each price cap local exchange
   carrier and rate-of-return carrier affiliated with a price cap local
   exchange carrier will have a “monthly baseline support amount” equal to
   its baseline support amount divided by twelve. Beginning January 1,
   2012, on a monthly basis, eligible carriers will receive their monthly
   baseline support amount.

   (1) “Total 2011 support” is the amount of support disbursed to a price
   cap local exchange carrier or rate-of-return carrier affiliated with a
   price cap local exchange carrier for 2011, without regard to prior
   period adjustments related to years other than 2011 and as determined
   by USAC on January 31, 2012.

   (2) For the purpose of calculating the $3,000 per line limit, the
   average of lines reported by a price cap local exchange carrier or
   rate-of-return carrier affiliated with a price cap local exchange
   carrier pursuant to line count filings required for December 31, 2010,
   and December 31, 2011 shall be used.

   (3) A carrier receiving frozen high cost support under this rule shall
   be deemed to be receiving Interstate Access Support and Interstate
   Common Line Support equal to the amount of support the carrier to which
   the carrier was eligible under those mechanisms in 2011.

   (b) Incremental Support in 2012. From January 1, 2012, to December 31,
   2012, support in addition to baseline support defined in paragraph (a)
   of this section will be available for certain price cap local exchange
   carriers and rate-of-return carriers affiliated with price cap local
   exchange carriers as follows.

   (1) For each carrier for which the Wireline Competition Bureau
   determines that it has appropriate data or for which it determines that
   it can make reasonable estimates, the Bureau will determine an average
   per-location cost for each wire center using a simplified
   cost-estimation function derived from the Commission's cost model.
   Incremental support will be based on the wire centers for which the
   estimated per-location cost exceeds the funding threshold. The funding
   threshold will be determined by calculating which funding threshold
   would allocate all available incremental support, if each carrier that
   would be offered incremental support were to accept it.

   (2) An eligible telecommunications carrier accepting incremental
   support must deploy broadband to a number of unserved locations, as
   shown as unserved by fixed broadband on the then-current version of the
   National Broadband Map, equal to the amount of incremental support it
   accepts divided by $775.

   (3) A carrier may elect to accept or decline incremental support. A
   holding company may do so on a holding-company basis on behalf of its
   operating companies that are eligible telecommunications carriers,
   whose eligibility for incremental support, for these purposes, shall be
   considered on an aggregated basis. A carrier must provide notice to the
   Commission, relevant state commissions, and any affected Tribal
   government, stating the amount of incremental support it wishes to
   accept and identifying the areas by wire center and census block in
   which the designated eligible telecommunications carrier will deploy
   broadband to meet its deployment obligation, or stating that it
   declines incremental support. Such notification must be made within 90
   days of being notified of any incremental support for which it would be
   eligible. Along with its notification, a carrier accepting incremental
   support must also submit a certification that the locations to be
   served to satisfy the deployment obligation are not shown as served by
   fixed broadband provided by any entity other than the certifying entity
   or its affiliate on the then-current version of the National Broadband
   Map; that, to the best of the carrier's knowledge, the locations are,
   in fact, unserved by fixed broadband; that the carrier's current
   capital improvement plan did not already include plans to complete
   broadband deployment within the next three years to the locations to be
   counted to satisfy the deployment obligation; and that incremental
   support will not be used to satisfy any merger commitment or similar
   regulatory obligation. If a carrier intends to deploy to census blocks
   not initially identified at the time of election, it must inform the
   Commission, the Administrator, relevant state commissions, and any
   affected Tribal government of the change at least 90 days prior to
   commencing deployment in the new census blocks. No sooner than 46 days
   after the Wireline Competition Bureau issues a public notice announcing
   the updated deployment plans but prior to commencing deployment, the
   carrier must make the certifications described in this paragraph with
   respect to the new census blocks. If a carrier no longer intends to
   deploy to a previously identified census block, it must inform the
   Commission, the Administrator, relevant state commission, and any
   affected Tribal government prior to filing its certification pursuant
   to § 54.313(b)(2).

   (c) Incremental Support in 2013. From January 1, 2013, to December 31,
   2013, support in addition to baseline support defined in paragraph (a)
   of this section will be available for certain price cap local exchange
   carriers and rate-of-return carriers affiliated with price cap local
   exchange carriers as follows:

   (1) For each carrier for which the Wireline Competition Bureau
   determines that it has appropriate data or for which it determines that
   it can make reasonable estimates, the Bureau will determine an average
   per-location cost for each wire center using a simplified
   cost-estimation function derived from the Commission's high-cost proxy
   model. Incremental support will be based on the wire centers for which
   the estimated per-location cost exceeds the funding threshold. The
   funding threshold will be determined by calculating which funding
   threshold would allocate all available incremental support, if each
   carrier that would be offered incremental support were to accept it.

   (2) An eligible telecommunications carrier accepting incremental
   support must deploy broadband to a number of unserved locations, shown
   as unserved by fixed Internet access with speeds of at least 768 kbps
   downstream and 200 kbps upstream on the then-current version of the
   National Broadband Map, equal to the amount of incremental support it
   accepts divided by $775.

   (3) An eligible telecommunications carrier must accept funding pursuant
   to paragraph (c)(2) of this section before it may accept funding
   pursuant to paragraph (c)(3) of this section. If an eligible
   telecommunications carrier has committed to deploy to all locations
   eligible for support under paragraph (c)(2) of this section on routes
   or projects that can economically be built with $775 in Connect America
   funding for each location unserved by 768 kbps downstream and 200 kbps
   upstream plus an equal amount of non-Connect America carrier capital
   expenditure funding, but the carrier has not fully utilized its
   allotted funding, it may also count towards its deployment obligation
   locations shown as unserved by fixed Internet access with speeds of at
   least 3 Mbps downstream and 768 kbps upstream equal to the amount of
   remaining incremental support divided by $550.

   (4) A carrier may elect to accept or decline incremental support. A
   holding company may do so on a holding-company basis on behalf of its
   operating companies that are eligible telecommunications carriers,
   whose eligibility for incremental support, for these purposes, shall be
   considered on an aggregated basis. A carrier must provide notice to the
   Commission, the Administrator, relevant state commissions, and any
   affected Tribal government, stating the amount of incremental support
   it wishes to accept, the number of locations at the $775 amount, and
   the number of locations at the $550 amount, and identifying the areas
   by wire center and census block in which the designated eligible
   telecommunications carrier will deploy broadband to meet its deployment
   obligation; or stating that it declines incremental support. Such
   notification must be made within 75 days of being notified of any
   incremental support for which it would be eligible. If a carrier
   intends to deploy to census blocks not initially identified at the time
   of election, it must inform the Commission, the Administrator, relevant
   state commissions, and any affected Tribal government of the change at
   least 90 days prior to commencing deployment in the new census blocks.
   No sooner than 46 days after the Wireline Competition Bureau issues a
   public notice announcing the updated deployment plans but prior to
   commencing deployment, the carrier must make the certifications
   described in paragraph (c)(5) of this section with respect to the new
   census blocks. If a carrier no longer intends to deploy to a previously
   identified census block, it must inform the Commission, the
   Administrator, relevant state commission, and any affected Tribal
   government prior to filing its certification pursuant to § 54.313(b)(2).

   (5) Along with its notification, an eligible telecommunications carrier
   accepting incremental support must submit the following certifications:

   (i) The locations to be served to satisfy the deployment obligation are
   not shown as served by fixed broadband at the speeds specified in
   paragraph (c)(2) or (c)(3) of this section provided by any entity other
   than the certifying entity or its affiliate on the then-current version
   of the National Broadband Map or that it is challenging the National
   Broadband Map's designation of that census block under the challenge
   process in paragraph (c)(7) of this section;

   (ii) To the best of the carrier's knowledge, the locations are, in
   fact, unserved by fixed Internet access with speeds of at least 3 Mbps
   downstream and 768 kbps upstream, or 768 kbps downstream and 200 kbps
   upstream, as appropriate;

   (iii) The carrier's current capital improvement plan did not already
   include plans to complete broadband deployment within the next three
   years to the locations to be counted to satisfy the deployment
   obligation;

   (iv) Incremental support will not be used to satisfy any merger
   commitment or similar regulatory obligation; and

   (v) The carrier has undertaken due diligence to determine the locations
   in question are not within the service area of either Broadband
   Initiatives Program or the Broadband Technology Opportunities Program
   projects that will provide Internet access with speeds of at least 3
   Mbps downstream and 768 upstream.

   (6) An eligible telecommunications carrier deploying to locations
   unserved by 3 Mbps downstream and 768 kbps upstream under paragraph
   (c)(3) of this section must also certify that it has prioritized its
   planned projects or routes so as to maximize the deployment of
   broadband-capable infrastructure to locations lacking Internet access
   with speeds of 768 kbps downstream and 200 kbps upstream.

   (7) A person may challenge the designation of a census block as served
   or unserved by a certain speed as shown on the National Broadband Map.
   When the Wireline Competition Bureau determines that the evidence
   presented makes it more likely than not that the census block should be
   designated as served by broadband with speeds of at least 3 Mbps
   downstream and 768 kbps upstream, that locations in that census block
   will be treated as served by broadband and therefore ineligible to be
   counted for the purposes of paragraph (c)(3) of this section. When the
   Wireline Competition Bureau determines that the evidence presented
   makes it more likely than not that the census block should be
   designated as served by Internet service with speeds of 768 kbps
   downstream and 200 kbps upstream, but unserved by broadband with speeds
   of at least 3 Mbps downstream and 768 kbps upstream, locations in that
   census block will be treated as served by Internet access with speeds
   of 768 kbps downstream and 200 kbps upstream and therefore eligible to
   be counted for the purposes of paragraph (c)(3) of this section. When
   the Wireline Competition Bureau determines that the evidence presented
   makes it more likely than not that the census block should be
   designated as unserved by Internet service with speeds of 768 kbps
   downstream and 200 kbps upstream, locations in that census block will
   be treated as unserved by Internet access with speeds of 768 kbps
   downstream and 200 kbps upstream and therefore eligible to be counted
   for the purposes of paragraph (c)(2) of this section.

   (8) If no entity other than the carrier or its affiliate provides
   Internet service with speeds of 3 Mbps downstream and 768 kbps upstream
   or greater as shown on the National Broadband Map or as determined by
   the process described in paragraph (c)(7), the carrier may satisfy its
   deployment obligations at a location shown by the National Broadband
   Map as being served by that carrier or its affiliate with such service
   by certifying that it is the only entity providing such service, that
   the location does not actually receive speeds of 3 Mbps downstream and
   768 kbps upstream, and the location is served through a copper-fed
   digital subscriber line access multiplexer. The carrier must
   specifically identify such locations in its election. Such locations
   will be treated the same as locations under paragraph (c)(3) of this
   section.

   (9) An eligible telecommunications carrier must complete deployment of
   broadband-capable infrastructure to two-thirds of the required number
   of locations within two years of providing notification of acceptance
   of funding, and must complete deployment to all required locations
   within three years. To satisfy its deployment obligation, the eligible
   telecommunications carrier must offer broadband service to such
   locations of at least 4 Mbps downstream and 1 Mbps upstream, with
   latency sufficiently low to enable the use of real-time communications,
   including Voice over Internet Protocol, and with usage allowances, if
   any, associated with a specified price for a service offering that are
   reasonably comparable to comparable offerings in urban areas.

   (d) Eligibility for support after Connect America Phase II auction. (1)
   A price cap carrier that receives monthly baseline support pursuant to
   this section and is a winning bidder in the Connect America Phase II
   auction shall receive support at the same level as described in
   paragraph (a) of this section for such area until the Wireline
   Competition Bureau determines whether to authorize the carrier to
   receive Connect America Phase II auction support for the same area.
   Upon the Wireline Competition Bureau's release of a public notice
   approving a price cap carrier's application submitted pursuant to
   § 54.315(b) and authorizing the carrier to receive Connect America Fund
   Phase II auction support, the carrier shall no longer receive support
   at the level of monthly baseline support pursuant to this section for
   such area. Thereafter, the carrier shall receive monthly support in the
   amount of its Connect America Phase II winning bid.

   (2) Starting the first day of the month following the first
   authorization of Connect America Phase II auction support nationwide,
   no price cap carrier that receives monthly baseline support pursuant to
   this section shall receive such monthly baseline support for areas that
   are ineligible for Connect America Phase II auction support.

   (3) To the extent Connect America Phase II auction support is not
   awarded at auction for an eligible area, as determined by the Wireline
   Competition Bureau, the price cap carrier shall have the option of
   continuing to receive support at the level described in paragraph (a)
   of this section until further Commission action.

   (4) Starting the first day of the month following the authorization of
   Connect America Phase II auction support to a winning bidder other than
   the price cap carrier that receives monthly baseline support pursuant
   to this section for such area, the price cap carrier shall no longer
   receive monthly baseline support pursuant to this section.

   (5) Notwithstanding the foregoing schedule, the phase-down of support
   below the level described in paragraph (a) of this section shall be
   subject to the restrictions in Consolidated Appropriations Act, 2016,
   Public Law 114-113, Div. E, Title VI, section 631, 129 Stat. 2242, 2470
   (2015), unless and until such restrictions are no longer in effect.

   [ 76 FR 73872 , Nov. 29, 2011, as amended at  77 FR 31536 , May 29, 2012;
    78 FR 38233 , June 26, 2013;  78 FR 48624 , Aug. 9, 2013;  84 FR 8624 , Mar.
   11, 2019]

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