FCC Publishes R&O Raising Opex Limit on Tribal Lands in the Federal Register
On April 5, 2018, the Commission released a Report and Order (“Order”) increasing the amount of operating costs that carriers that predominately service Tribal lands can recover from the universal service fund (“USF”) in recognition that they are likely to have higher costs than carriers not serving Tribal lands. The Commission anticipates that this action will provide additional funding to carriers serving Tribal lands to provide both voice and broadband services to their customers.
In March 2016, the Commission established a new mechanism for distributing Connect America Fund (“CAF”) support in rate-of-return areas, and adopted a limitation on the amount of operating expenses (“opex”) for which rate-of-return carriers may receive high cost support: the limit on opex costs was set at the cost per location calculation plus 1.5 standard deviations. Now, with this Order, the Commission raises the opex limitation to 2.5 standard deviations above the regression-determined amount for those carriers that qualify subject to certain criteria, rather than remove the limitation altogether.
Relief is limited to those carriers who meet the following conditions: 1) the carrier has not deployed broadband service of 10 Mbps download/1 Mbps upload to 90 percent or more of the housing units on the Tribal lands in its study area; and 2) unsubsidized competitors have not deployed broadband service of 10 Mbps download/1 Mbps upload to 85 percent or more of the housing units on the Tribal lands in its study area. The FCC estimates that five carriers (Pine Telephone, Terral Tel Co, Gila River Telecom, Fort Mojave Tel, Saddleback Comm) that have been affected by the opex cap are eligible for the relief, and directs USAC to use the 2.5 standard deviation metric for these areas for support calculations for the period beginning January 1, 2017, when the limitation was implemented.
Pursuant to the May 1, 2018 Federal Register publication, the following Order effective date has been established:
This Order is effective May 31, 2018.
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