11.02.15

Cantwell, Washington State Delegation Push FCC for Fairer Access to Rural Broadband

WASHINGTON, D.C. – In a bipartisan, bicameral letter to the Federal Communications Commission, U.S. Senator Maria Cantwell (D-WA) pushed for more robust, efficient and cost effective broadband. Cantwell was joined by all 11 other members of Congress representing Washington state.

The letter expresses concerns for potentially negative impacts of the FCC’s implementation of the Alternative Connect America Cost Model (A-CAM), which estimates the cost of building infrastructure for rural broadband providers, including areas of Washington state. The delegation urged the FCC to adopt a fairer model that incorporates input from smaller broadband companies as well as recognizes the unique characteristics of these companies in order to ensure they can continue investment in the delivery of quality broadband to rural areas.

“We support the goal of developing robust broadband capable networks in rural America, including rural Washington.  Such broadband capable networks are the key to economic development and commerce in our rural, agricultural areas,” the delegation wrote in the letter. “We ask that the Commission invest sufficient time and care to be sure any new system for new investment be accurate, cost-beneficial, and that the details be fully vetted and transparent.”

Robust broadband is vital to our nation’s economic development, particularly in rural communities where reliable broadband networks are key to market access and expanding economic growth. Small broadband providers often serve rural communities and populations most in need of connectivity, yet can face the highest costs for delivery. The current A-CAM cost model does not adequately incorporate the input of smaller providers and is unduly burdensome to such providers.  Under the current proposed model, Washington’s rural providers are projected to lose more than $4 million in universal service support compared with last year’s levels. 

The full letter can be viewed here.

Chairman Tom Wheeler
Federal Communications Commission
445 12th Street SW
Washington, DC 20554

 

Dear Chairman Wheeler:

As members of the Washington State Congressional Delegation, we write to you to express our concern about the potential negative impact on the State of Washington that could arise from the Federal Communications Commission’s implementation of the Alternative Connect America Cost Model or A-CAM. 

Under all versions of A-CAM that have been proposed to date, there is a significant reduction in high-cost support for rural areas in the State of Washington.  In fact, the reduction is projected to be over $ 4 million on an annual basis, or nearly one-third of the 2014 level of support. 

In looking at the results from the A-CAM model for Washington state, we are concerned about the efficacy of the model in its current standing. 

We have been informed that the A-CAM model, which is applied to rate-of-return companies, was developed using price cap inputs.

As the Commission is fully aware, rate-of-return companies are much smaller than their price cap counterparts and the costs tend to be higher.

Instead of relying on the model as it currently stands, we advocate that any forward looking cost model adopted by the Commission to apply to small rate-of-return companies should be developed in a way that recognizes the unique characteristics of those rate-of-return companies, rather than using data from the larger price cap companies.

We support the goal of developing robust broadband capable networks in rural America, including rural Washington.  Such broadband capable networks are the key to economic development and commerce in our rural, agricultural areas.  Washington’s rate-of-return companies have made great strides in this area, and some offer the fastest Internet speeds available in our state.  But there is more work to do and we are concerned that using a mismatched cost model will have the effect of stunting the further development of those broadband capable networks.

We ask that the Commission focus its attention on developing a forward looking cost model using rate-of-return company inputs including as many company-specific inputs as is feasible.  We also ask that the Commission invest sufficient time and care to be sure any new system for new investment be accurate, cost-beneficial, and that the details be fully vetted and transparent.

Furthermore, while we recognize that the model is optional, we are also concerned about the uncertainty of alternative FCC proposals that may require carriers to keep two sets of books.

Accordingly we also urge the FCC to adopt a methodology that minimizes the administrative burden on small, rural, rate-of-return companies.

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